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Market importance: High. Almost always moves markets. Very timely. Contains information about both job and wage growth and is considered the single best measure of the health of the economy. The tone of the employment report generally sets the tone for the other economic indicators that are released throughout the month.
Other notes:
(a) Two key pieces of this report -- the unemployment rate and average hourly earnings -- appear in many inflation models. And various pieces of this report are used to help predict a host of other economic indicators. Average hourly earnings are used to help predict both personal income and the wages and salaries component of the Employment Cost Index. The index of aggregate manufacturing hours is used to help predict industrial production. The change in construction jobs is used to help predict both housing starts and construction spending.
(b) For average hourly earnings, the headline number is the percent change from the prior month, but we also graph the year-on-year change. That way you can see the rate at which earnings are increasing or decreasing
New home sales
Official name: New One-Family Houses Sold
What exactly? A measure of the selling rate of new one-family houses.
Includes a geographical breakdown as well as a measure of prices and house inventory (the number of months it would take to deplete the existing supply of new houses at the current sales pace).
Source: Census Bureau
Frequency: Monthly
Released when? Around the end of the month (or at the beginning of the following month) at 10 a.m. Eastern. Data for prior month.
Market importance: Some. Sometimes moves markets. Timely. Considered a good gauge of near-term spending for housing-related items and of consumer spending in general.
Other notes: Sales of new houses account for roughly 16% of all houses sold. Sales of existing (or pre-owned) houses account for the other 84%. s
Gross domestic product
What exactly? A measure in the change in the market value of goods, services and structures produced in the economy.
Source: Commerce Department
Frequency: Quarterly
Released when? At 8:30 a.m. Eastern. The first-pass estimate of GDP is called the advance report and is released on the last business day of January, April, July, and October (data for prior quarter). The second-pass estimate is called the preliminary report and is released a month later; the third-pass estimate is called the final report and is released yet another month later.
Market importance: High. The actual pace at which the economy is growing or shrinking -- especially as it relates to expectations -- frequently moves markets.
Other notes:
(a) The GDP release also includes a key inflation measure called the price index for gross domestic purchases. It measures the prices of everything -- including imports -- that Americans buy.
(b) Personal consumption expenditures typically account for roughly 68% of GDP. Investment, government spending and net exports account for the rest.
Manufacturing ISM Report On Business
Official name: ISM Index: Manufacturing
What exactly? A national manufacturing index based on a survey of purchasing executives at roughly 300 industrial companies. Signals expansion when the PMI is above 50 and contraction when below.
Source: Institute for Supply Management
Frequency: Monthly
Released when? First business day of the month at 10 a.m. Eastern. Data for prior month.
Market importance: High. Nearly always moves markets. Extremely timely -- and this is the king of all manufacturing indices. Considered the single best snapshot of the condition of the factory sector.
Other notes: The ISM Index calculates nine different sub-indices. These include new orders, production, employment, supplier deliveries, inventories, prices, new export orders, imports and backlog of orders. The production index is used to help predict industrial production. The prices index is used to help predict the Producer Price Index. The new orders index is used to help predict factory orders. The employment index is used to help predict manufacturing employment. And the supplier deliveries index is a component of the leading economic indicators index.
Initial jobless claims
What exactly? A measure of the number of people filing first-time claims for state unemployment insurance.
Source: Labor Department
Frequency: Weekly
Released when? Thursday at 8:30 a.m. Eastern. Data for week ended prior Saturday.
Market importance: Some. Occasionally moves market. Timely. Considered a good gauge of the condition of the labor market and good indicator of the tone of the employment report.
Other notes: Series is volatile and subject to big revisions. The four-week average is used to gauge the underlying trend in claims.
Durable goods orders
Official name: Advance Report on Durable Goods Manufacturers' Shipments and Orders
What exactly? A measure of the value of orders received by manufacturers for durable goods -- goods designed to last three years or more (such as motor vehicles and appliances).
Source: Census Bureau
Frequency: Monthly
Released when? Around the 26th of the month at 8:30 a.m. Eastern. Data for prior month.
Market importance: Much. Timely and volatile. Frequently moves markets. Considered a key factory-sector indicator
Other notes:
(a) Report also includes shipments (a synonym for sales) and unfilled orders.
(b) Nondefense capital goods shipments used to predict the business investment component of gross domestic product.
(c) The portion of the durables report that measures manufacturers' new orders for consumer goods and materials is a component of the leading economic indicators index -- as is the portion that measures new orders for nondefense capital goods.
(d) The headline number is the percent change from the prior month, but we also graph the year-on-year change. That way you can see the rate at which durable goods orders are increasing or decreasing
PPI = Producer Price Index
What exactly? An index (1982 = 100) that measures the change in prices received by domestic producers of commodities in all stages of processing (crude materials, intermediate materials, and finished goods).
Source: Labor Department
Frequency: Monthly
Released when? Around the 13th of the month at 8:30 Eastern. Data for prior month.
Market importance: High. Timely. All inflation measures routinely move markets.
Other notes:
(a) The "core" PPI excludes the often-volatile food and energy sectors and gives a clearer picture of the underlying inflation trend.
(b) The headline number is the percent change from the prior month, but we also graph the year-on-year change. That way you can see the rate at which wholesale inflation is increasing or decreasing.
Consumer price index
What exactly? An index (1982-84 = 100) that measures the change in cost of a representative basket of goods and services such as food, energy, housing, clothing, transportation, medical care, entertainment and education.
Source: Labor Department
Frequency: Monthly
Released when? Around the 15th of the month at 8:30 Eastern. Data for prior month.
Market importance: High. Timely. All inflation measures routinely move markets.
Other notes:
(a) The "core" CPI excludes the often-volatile food and energy sectors and gives a clearer picture of the underlying inflation trend.
(b) The CPI for medical care is used to help predict the benefit costs portion of the employment cost index. The CPI for gasoline is used to predict the gasoline stations portion of the retail sales report. The CPI for new vehicles is used to predict the vehicle portions of the retail sales and personal income and consumption reports.
(c) The headline number is the percent change from the prior month, but we also graph the year-on-year change. That way you can see the rate at which consumer inflation is increasing or decreasing.
Federal open market committee (FOMC Minutes)
The Federal Open Market Committee, or FOMC, is the Fed's monetary policy committee. It meets eight times a year in Washington (the schedule is on the Fed's Web site) to set the fed funds rate.
Announcements of changes in monetary policy are at about 2:15 p.m. Eastern Time (on the second day if it's a two-day meeting), and the minutes of the meetings are released within a few days of having been approved by the committee at its subsequent meeting.
The FOMC has 12 voting members and five alternates. The seven Fed governors always vote, as does the president of the New York Fed. The other 11 District Fed presidents vote on a rotating schedule. The Chicago Fed president votes in odd-numbered years, while the Cleveland Fed president votes in even-numbered years. The remaining nine presidents vote every third year, according to this schedule: Philadelphia, Dallas, Minnesota (1999, 2002); Richmond, Atlanta, San Francisco (2000, 2003); Boston, St. Louis, Kansas City (2001, 2004).
Alternates vote only if a District Fed president can't make the meeting. The first vice president of the New York Fed is the New York Fed president's alternate. The Chicago and Cleveland Fed presidents alternate for each other. And the other District Fed presidents are alternates the year before they vote. For example, if the Philly Fed president is absent, the Richmond Fed president votes instead.
Industrial production and capacity utilization
Official name: Federal Reserve Statistical Release G.17
What exactly? A measure of the change in the production of the nation's factories, mines and utilities. Also includes a measure of their industrial capacity and how much of it is being used (commonly known as capacity utilization).
Source: Federal Reserve
Frequency: Monthly
Released when? Around the 15th of the month at 9:15 a.m. Eastern. Data for prior month.
Market importance: Much. Frequently moves markets. Timely. Considered a key factory-sector gauge. Capacity utilization considered a telling inflation indicator.
Other notes:
(a) The level of industrial production divided by the level of industrial capacity equals the capacity utilization rate.
(b) The headline lare the percent change in production from the prior month and the capacity utilization rate. We also graph the year-on-year change in both production and capacity, alongside capacity utilization, to illustrate the relationship between the three.
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