10 Major Economic Reports

8/3/2019 10 Major Economic Reports

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BY:-

SAKET NATH THAKUR

PGDBM(FINANCE)

10 Major Economic Reports


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INTRODUCTION There is a lot of economic datareleased each week but there are

some reports that hold specialsignificance these are reports thattraders really get up for. The datareleased in these reports oftenshapes the entire trading session.

The state of the current economic

cycle also has an impact on howanticipated each of these reportsare. For example, during boomtimes, most eyes will be on inflationand the consumer price index aspeople watch for signs that theeconomy is overheating and duringtough times, the employmentnumbers (i.e. non-farm payrolls) arecenter stage as economists look fora rebound in job losses.

Either way, if you follow the marketspassively or actively, make surethese blockbuster economic reportsare always on your radar lest yourun the risk of getting blindsided by

market sentiment.


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Jobless claims

The number of people who file forunemployment benefits in a givenweek. This data is collected by theDepartment of Labor, and publishedas a weekly report. The number ofjobless claims is used as a measureof the health of the job market, as a

series of increases indicates thatthere are fewer people being hired.


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Consumer Price Index

CPI. An inflationary indicator thatmeasures the change in the cost ofa fixed basket of products andservices, including housing,electricity, food, and transportation.The CPI is published monthly. Alsocalled cost-of-living index.


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Non-farm payroll

A statistic gathered by the U.S.Bureau of Labor Statistics, whichrepresents the payroll data for themajority of the United States withthe exception of a few categories ofemployees. The employees that arenot included in this calculation

include government employees,nonprofit employees, individualswho work within a privatehousehold, and farm employees.Once these categories are removed,the data represents about 80% ofUnited States employees, and

provides monthly information aboutsalary which is used as an indicatorof the health of the economy.


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Producer Price Index

PPI. An inflationary indicatorpublished by the U.S. Bureau ofLabor Statistics to evaluatewholesale price levels in theeconomy. Previously called

Wholesale Price Index.


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Beige Book

Report on current economicconditions, published by theFederal Reserve Board eight timeseach year. The Beige Book is part ofthe Federal Open MarketCommittee's preparations for itsmeetings. The report is released

two Wednesdays before each FOMCmeeting at 2:15 pm EST. The bookis a summary of economicconditions in each of the Fed'sregions. The report is primarily seenas an indicator of how the Fedmight act at its upcoming meeting.


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Consumer Confidence Index

A measure of consumer optimismtoward current economicconditions. The consumerconfidence index was arbitrarily setat 100 in 1985 and is adjustedmonthly on the basis of a survey ofabout 5,000 households. The index

considers consumer opinion onboth current conditions (40% of theindex) and future expectations (theother 60%). The ConsumerConfidence Index is closelywatched because many economistsconsider consumer optimism an

important indicator of the futurehealth of the economy.


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Durable goods orders

A government report whichmeasures consumer spending onlong-term purchases, products thatare expected to last more than threeyears. It is intended to offer a gaugeof the future of the manufacturingindustry. The report is made at 8:30

am EST around the 26th of eachmonth and is thought to provideinsight into the future for themanufacturing industry. The reportsare broken down by industry, whichhelps to eliminate the effects ofsingle volatile industries like

defense spending.


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Gross Domestic Product

The total market value of all final goods andservices produced in a country in a givenyear, equal to total consumer, investmentand government spending, plus the value ofexports, minus the value of imports. TheGDP report is released at 8:30 am EST on thelast day of each quarter and reflects theprevious quarter. Growth in GDP is whatmatters, and the U.S. GDP growth has

historically averaged about 2.5-3% per yearbut with substantial deviations. Each initialGDP report will be revised twice before thefinal figure is settled upon: the "advance"report is followed by the "preliminary" reportabout a month later and a final report amonth after that. Significant revisions to theadvance number can cause additionalripples through the markets. The GDP

numbers are reported in two forms: currentdollar and constant dollar. Current dollarGDP is calculated using today's dollars andmakes comparisons between time periodsdifficult because of the effects of inflation.Constant dollar GDP solves this problem byconverting the current information into somestandard era dollar, such as 1997 dollars.This process factors out the effects ofinflation and allows easy comparisonsbetween periods. It is important to


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Retail sales index

A monthly measurement of allgoods sold by retailers based on asampling of retail stores of differenttypes and sizes. The retail salesindex is often taken as an indicatorof consumer confidence. Releasedat 8:30 am EST around the 12th ofeach month, the report reflects datafrom the previous month. This

report is the "advance" report,which can be revised fairlysignificantly after the final numbersare calculated. Many analystschoose to look at the figures "ex-auto", which means excluding thevolatile car sales figure. It isthought that this number is a bettermeasure of across-the-board

purchasing trends. The report doesnot include money spent onservices, so it represents less thanhalf of total consumption during themonth. However, even with theselimitations, the figures are closelywatched as an indicator of thehealth of the economy.


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Housing starts

The number of residential buildingconstruction projects begun duringa specific period of time, usually amonth; a key economic indicator.

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10 Major Economic Reports