10 Major Economic Reports
Presented by,
M.Seshasalam
• Introduction:
• There is a lot of economic data released each week but
there are some reports that hold special significance – these
are reports that traders really get up for. The data released
in these reports often shapes the entire trading session.
The state of the current economic cycle also has an impact
on how anticipated each of these reports are. For example,
during boom times, most eyes will be on inflation and the
consumer price index as people watch for signs that the
economy is overheating and during tough times, the
employment numbers (i.e. non-farm payrolls) are center
stage as economists look for a rebound in job losses.
Either way, if you follow the markets passively or actively,
make sure these blockbuster economic reports are always
on your radar lest you run the risk of getting blindsided by
market sentiment.
Jobless claims
• The number of people who file
for unemployment benefits in a
given week. This data is
collected by the Department of
Labor, and published as a
weekly report. The number of
jobless claims is used as a
measure of the health of the
job market, as a series of
increases indicates that there
are fewer people being hired.
Consumer Price Index
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• Consumer Price Index
• CPI. An inflationary indicator
that measures the change in
the cost of a fixed basket of
products and services,
including housing, electricity,
food, and transportation. The
CPI is published monthly. Also
called cost-of-living index.
Non-farm payroll
• A statistic gathered by the U.S. Bureau of
Labor Statistics, which represents the
payroll data for the majority of the United
States with the exception of a few
categories of employees. The employees
that are not included in this calculation
include government employees, nonprofit
employees, individuals who work within a
private household, and farm employees.
Once these categories are removed, the
data represents about 80% of United States
employees, and provides monthly
information about salary which is used as
an indicator of the health of the economy.
Producer Price Index
• Producer Price Index
• PPI. An inflationary indicator
published by the U.S. Bureau
of Labor Statistics to evaluate
wholesale price levels in the
economy. Previously called
Wholesale Price Index.
Beige Book
• Report on current economic
conditions, published by the
Federal Reserve Board eight
times each year. The Beige
Book is part of the Federal
Open Market Committee's
preparations for its meetings.
The report is released two
Wednesdays before each
FOMC meeting at 2:15 pm EST.
The book is a summary of
economic conditions in each of
the Fed's regions. The report is
primarily seen as an indicator
of how the Fed might act at its
upcoming meeting.
Consumer Confidence Index
• A measure of consumer optimism
toward current economic
conditions. The consumer
confidence index was arbitrarily
set at 100 in 1985 and is adjusted
monthly on the basis of a survey
of about 5,000 households. The
index considers consumer opinion
on both current conditions (40%
of the index) and future
expectations (the other 60%). The
Consumer Confidence Index is
closely watched because many
economists consider consumer
optimism an important indicator
of the future health of the
economy.
Durable goods orders
• A government report which
measures consumer spending on
long-term purchases, products
that are expected to last more
than three years. It is intended to
offer a gauge of the future of the
manufacturing industry. The
report is made at 8:30 am EST
around the 26th of each month
and is thought to provide insight
into the future for the
manufacturing industry. The
reports are broken down by
industry, which helps to eliminate
the effects of single volatile
industries like defense spending.
Gross Domestic Product
• GDP. The total market value of all final goods and services produced in a country in a given year,
equal to total consumer, investment and government spending, plus the value of exports, minus
the value of imports. The GDP report is released at 8:30 am EST on the last day of each quarter
and reflects the previous quarter. Growth in GDP is what matters, and the U.S. GDP growth has
historically averaged about 2.5-3% per year but with substantial deviations. Each initial GDP
report will be revised twice before the final figure is settled upon: the "advance" report is
followed by the "preliminary" report about a month later and a final report a month after that.
Significant revisions to the advance number can cause additional ripples through the markets.
The GDP numbers are reported in two forms: current dollar and constant dollar. Current dollar
GDP is calculated using today's dollars and makes comparisons between time periods difficult
because of the effects of inflation. Constant dollar GDP solves this problem by converting the
current information into some standard era dollar, such as 1997 dollars. This process factors out
the effects of inflation and allows easy comparisons between periods. It is important to
differentiate Gross Domestic Product from Gross National Product (GNP). GDP includes only
goods and services produced within the geographic boundaries of the U.S., regardless of the
producer's nationality. GNP doesn't include goods and services produced by foreign producers,
but does include goods and services produced by U.S. firms operating in foreign countries.
Retail sales index
• A monthly measurement of all goods sold by
retailers based on a sampling of retail stores
of different types and sizes. The retail sales
index is often taken as an indicator of
consumer confidence. Released at 8:30 am
EST around the 12th of each month, the
report reflects data from the previous
month. This report is the "advance" report,
which can be revised fairly significantly after
the final numbers are calculated. Many
analysts choose to look at the figures "ex-
auto", which means excluding the volatile car
sales figure. It is thought that this number is
a better measure of across-the-board
purchasing trends. The report does not
include money spent on services, so it
represents less than half of total
consumption during the month. However,
even with these limitations, the figures are
closely watched as an indicator of the health
of the economy.
Housing starts
• he number of
residential building
construction projects
begun during a specific
period of time, usually a
month; a key economic
indicator.
