ECONOMIC INDICATORS

1

• ECONOMIC INDICATORS

2
Understanding Economic Indicators

• Background Economic Theme Recognize the stage of
  the business cycle.

3
Cycle of the Indicator

• Leading indicator used to predict changes in the
  economy. Its trajectory changes before the
  economy follows a particular pattern. i.e.
  Conference Board LI
• Coincident indicator varies simultaneously with
  the business cycle. It indicates current economic
  conditions. i.e. industrial production
• Lagged indicator follows the business cycle
  with lags. It illustrates where the economy has
  been. i.e. corporate profits

4
Nominal vs Real
5
Adjusted vs Non-adjusted
6
Growth Rates
7
Indicators by Sector of Economic Activity
8
GDP

• Published by Bureau of Economic Analysis (BEA)
• Frequency Quarterly
• Period Covered Prior quarter
• Market significance High
• Best measure of economic activity
• Economic Indicators.gov

9
Consumer Spending
10
Personal Income and Spending

• Published by BEA
• Frequency monthly
• Period Covered prior month
• Market significance Moderate
• Accounts for about 2/3 of real GDP but undergoes
  frequent revisions
• Economic Indicators.gov

11
Car and Truck Sales

• Published by Motor Vehicle Manufacturers and
  Importers
• Frequency Monthly
• Period Covered Prior month
• Market significance moderate
• Leading indicator of economic activity. Undergoes
  revisions.

12
Retail Sales

• Published by Bureau of the Census
• Frequency Monthly
• Period Covered Prior month
• Market significance High
• First indicator of consumer activity
• Latest Advance Monthly Sales for Retail and Food
  Services

13
Home Sales

• Published by Bureau of the Census
• Frequency monthly
• Period Covered prior month
• Market significance moderate
• Leading indicator of economic activity. High
  volatility.
• http//www.census.gov/cgi-bin/briefroom/BriefRm

14
Consumer Credit

• Published by Federal Reserve Board
• Frequency monthly
• Period Covered two prior months
• Market significance moderate
• Indicator of the financial health of consumers.
  But comes in late.

15
Consumer Confidence Measures

• Published by University of Michigan, the
  Conference Board, and ABC News.
• Frequency monthly
• Period Covered varies
• Market significance moderate
• Leading indicator of consumer spending.
• http//www.conference-board.org/economics/Consumer
  Confidence.cfm

16
Industrial Activity
17
ISM Manufacturing Survey

• Published by Institute for Supply Management
  (ISM)
• Frequency Monthly
• Period Covered Prior month
• Market significance Very high
• First report on industrial activity.
• http//www.ism.ws/ISMReport/MfgROB.cfm?navItemNumb
  er12942

18
Industrial Production and Capacity Utilization

• Published by Board of Governors of the Federal
  Reserve System
• Frequency monthly
• Period Covered prior month
• Market significance moderate
• Good forecast of business cycle.

19
Housing Starts/Building Permits

• Published by Bureau of the Census
• Frequency monthly
• Period Covered prior month
• Market significance moderate
• Good predictor of business cycle. Subject to
  revisions.

20
Durable Goods Orders

• Published by Bureau of the Census
• Frequency monthly
• Period Covered prior month
• Market significance high
• Key indicator on future manufacturing.

21
Construction Expenditures

• Published by Bureau of the Census
• Frequency monthly
• Period Covered prior month
• Market significance low
• Good coverage. But late and with major revisions
• http//www.census.gov/const/C30/release.pdf

22
Business Inventories and Sales

• Published by Bureau of the Census
• Frequency monthly
• Period Covered two prior months
• Market significance low
• Inventories affect the pace of future industrial
  activity. But report comes in late.

23
Factory Orders and Manufacturing Inventories

• Published by Bureau of the Census
• Frequency monthly
• Period Covered two prior months
• Market significance low
• Overlapping information with the Advanced Report
  on Durable Goods

24
Productivity and Costs

• Published by BEA
• Frequency quarterly
• Period Covered prior quarter
• Market significance moderate
• Useful information about inflation, however, it
  is subject to substantial revisions.

25
Government Spending
26
Federal Budget

• Published by Treasury Department
• Frequency monthly
• Period Covered prior month
• Market significance low

27
Foreign Sector
28
Merchandise Trade Balance

• Published by Bureau of the Census
• Frequency monthly
• Period Covered two prior months
• Market significance moderate
• http//www.census.gov/foreign-trade/Press-Release/
  current_press_release/ft900.pdf

29
Current Account Balance

• Published by BEA
• Frequency Quarterly
• Period Covered Previous quarter
• Market significance moderate

30
Foreign Industrial Productions

• Japan Industrial Production
• Published by Ministry of Economy, Trade and
  Industry, Japan
• Frequency Monthly
• Period covered Previous month
• China Industrial Production
• Published by National Bureau of Statistics of
  China
• Frequency Monthly
• Period covered Previous month
• German Industrial Production
• Published by Federal Statistics Office, Germany
• Frequency Monthly
• Period covered Previous month

31
Global Manufacturing Purchasing Managers Index

• Published by JP Morgan
• Frequency monthly
• Period Covered prior month
• Market significance moderate
• http//www.ism.ws/ISMReport/content.cfm?ItemNumber
  17719

32
OECD Composite Leading Indicators

• Published by OECD
• Frequency monthly
• Period Covered prior month
• Market significance moderate

33
Labor Market
34
Employment (payroll employment and unemployment
rate)

• Published by Bureau of Labor Statistics (BLS)
• Frequency Monthly
• Period Covered prior month
• Market significance very high
• First complete look at economic activity.
• http//stats.bls.gov/news.release/pdf/empsit.pdf

35
Employment Cost Index

• Published by BLS
• Frequency quarterly
• Period Covered prior quarter
• Market significance moderate
• Comprehensive measure of labor cost. But
  published only quarterly.

36
Unemployment Insurance Claims

• Published by U.S. Department of Labor
• Frequency weekly
• Period Covered prior week
• Market significance moderate
• Accurate in gauging labor market conditions.

37
Inflation
38
Producer Price Index

• Published by BLS
• Frequency monthly
• Period Covered prior month
• Market significance high
• Good measure of inflation.

39
Consumer Price Index

• Published by BLS
• Frequency monthly
• Period Covered prior month
• Market significance high
• Key measure of inflation
• http//stats.bls.gov/news.release/pdf/cpi.pdf

40
Specialized Indicators
41
Cyclical Indicators

• Published by BEA/The Conference Board
• Frequency monthly
• Period Covered prior month
• Market significance moderate