U.S. macroeconomic indicators
Atlanta Fed index
It is regional manufacturing survey that covers Georgia, Alabama, Florida, Tennessee and Louisiana. The index gives a signal of factory-sector expansion when above zero and contraction when below it. This index has a limited impact on the market as published after ISM index. The increased value of the index is a favorable factor for USD growth.
Significance: Low
Publication: after the 10th of the month, 9.00 (EST)
Source: Federal Reserve Bank of Atlanta
Web:www.frbatlanta.org
Average hourly earnings
It represents an average level of changes in hourly wages. The indicator is expressed in terms of absolute value and as an index relative to the previous period or in the form of the average hourly or weekly wage. It is an indicator of potential inflation but also an indicator of future consumer spending. It has a significant impact on the market. When there are expectations of increase in interest rates its value can lead to USD growth. The growth of wages fastening productivity would give a signal of dangers of price increases and that would be confirmation of readiness of the FED to raise interest rates.
Significance: Low
Publication: 8:30 (EST), the first Friday of the month.
Source: Bureau of Labor Statistics, Department of Labor (US)
Web: www.bea.gov
Web site of publication:www.bls.gov/news.release/empsit.toc.htm
Average weekly hours
This index determines the status of industrial production and personal income. It is considered to be an important indicator of labor market conditions: the growth of the working week at the early stage of the business cycle may be a signal that employers are prepared to raise wages while at the end of the growth cycle length of the workweek may indicate that employers have difficulty in finding skilled workers. The indicator shows the average weekly working hours during the month. It is expressed in terms of absolute value and as an index relative to the previous period and has no impact on the market. This indicator is used for a long-term analysis of the employment. It is a good indicator of the labor market at different stages of economic cycle. It is believed to be one of the determinative indicators for such indicators as "Industrial production" and "Personal income", the values of which are published later.
Significance: Low
Published: 8.30 (EST), the first Friday of each month
Source: The Bureau of Labor Statistics
Web:www.stats.bls.gov
Beige book
It represents a report of twelve banks of the Fed. It covers the area of manufacturing, services, agriculture, financial institutions, labor market, and real estate market. It has a limited impact on the market. When rumors of a possible change in interest rates appear on the market, then attention is paid to the part of the review where the status of wages and prices are described. The book is a source of confirmation of the already established trend in the economy.
Its value is published 8 times a year, on Wednesday, two weeks before the next meeting of FOMC, 2:00 PM (EST). The report is used for assessment of economic efficiency of regions and as an indicator of future monetary policy-making of FOMC.
Building permits
The indicator shows the number of permits for the construction of new homes. The number of permits issued is collected from 19 thousand organizations, and are considered to be a indicator of the number of constructions which will begin in the near future. The indicator is very sensitive to changes in basic interest rates as it is necessary to obtain bank loans. These data are subject to seasonal fluctuations. The process of construction is directly connected with state income. Therefore, the increase in the volume of construction is an improvement in its well-being and healthy development of the economy. It has a limited impact on the market. The growth of its value has a positive impact on the currency.
Significance: Low
Publication: second or third week of the month at 8.30 AM (EST) simultaneously with a "Housing starts".
Source: U.S. Census Bureau
Web: www.census.gov
Web site of publication: www.census.gov/const/www/newresconstindex.html
Business inventories
This indicator includes all manufacturing and goods stored in warehouses. There is the following regularity: an increase in stocks during several months may indicate the existence of stagnant phenomena in the economy. In other words, the increase in the indicator suggests weak marketing products. Overstocking warehouses negatively characterizes the state of the economy and lead to currency weakening. It i published in terms of three indicators: inventories, sales and ratio related to the realization. The impact of this indicator on the market is limited. However, a stable trend in its dynamics has a great influence on the market.
Significance: Low
Publication: 16.30 Moscow time, monthly through 6 days after data on durable goods
Source: US Census Bureau
Web: www.census.gov
Capacity utilization
It represents the ratio of total industrial output value to the total productivity of industries. This indicator determines the degree of capacity utilization industry. The level of 85% indicates a good balance between economic growth and inflation. The value above this level causes the inflation processes in the country's economy. It has a limited impact on the market. The growth of this index leads to an increase in the national currency.
Significance: Low
Publication: 15th of the month at 9:15 AM (EST) simultaneously with Industrial production.
Source: Federal Reserve Board
Web: www.federalreserve.gov
Web site of publication: www.federalreserve.gov/releases/g17/Current/default.htm
Chicago PMI index
It is the index of industrial enterprises of the Chicago region. The indicator represents the results of a survey of purchasing managers in the industry of Chicago and the status of production orders, prices of products and inventories in warehouses. The value below 50 indicates a slowdown in the economy and an increase in economic activity in the region if its value exceeds 50. It is kept a close eye on because it is published shortly before ISI (NAPM). This index has a high impact on the market. The growth of the index results in an increase in USD.
Significance: High
Publication: last business day of the month at 10:00 AM (EST)
Source: The National Association of Purchasing Management - Chicago (NAPM)
Web: www.napm-chicago.net/home
Web site of publication: www.kingbiz.com/library.asp
Construction spending
The indicator is expressed as an index against the previous period and in the form of absolute values of costs. It is divided into costs for construction of houses in the city, outside the city, spending of the population for new construction. The indicator is very sensitive to changes in basic interest rates as it is necessary to take bank loans for construction. These data are subject to seasonal fluctuations. The process of construction is directly connected with the population income. Therefore, the increase in the volume of construction is the improvement of their well-being and healthy development of the economy. It has a limited impact on the market. The growth of its value has a positive impact on the currency.
Significance: Low
Publication: first business day of the month at 10:00 AM (EST).
Source: U.S. Census Bureau
Web: www.census.gov/const/www/c30index.html
Consumer confidence
This report defines the optimism of consumers. Conference Board conducts monthly surveys of 5000 households selected for the assessment of the labor market, conditions for business, and their own assessments about the prospects for an increase in their earnings. The ground of level is the data taken in 1985. The initial value was equal to «100». Participants in the survey give the answers «better-worse» on several questions: The financial situation of the family compared to the previous period - Expected financial situation of the family during the year – Assessment of the business condition of the economy during the year - An estimation of the expected unemployment and economic downturn – An estimation of home purchases (clothes, household appliances, etc.). Index is considered to be a relative measure of the number of positive / negative responses. The index of consumer confidence is considered to be a leading indicator of business cycle. It has a limited impact on the market because it can not reflect the real state of the economy. However, it is traditionally used to predict trends in employment and the overall state of the economy. This index consists of two sub-indices – consumers’ evaluation of the current conditions and their expectations of future events. An increase in the index is a positive factor for development of the national economy and leads to an increase in USD.
Significance: Medium
Publication: After the 20th of the month at 10:00 AM (EST).
Source: Conference Board
Web: www.conference-board.org/economics/indicators.cfm
Consumer credit
Consumer credit is a form of public borrowing for the purchase of goods. This index reflects the volume of credits used by Americans through credit cards and personal loans and purchases by installments. It is an indicator of the consumer demand. The importance of this indicator shows that consumers are not afraid of taking credits to meet their material needs. However, the figures are often revised and have significant seasonal variations. For example, the value of consumer credit is growing on Christmas and New Year Eve. It has a limited impact on the market because it is published after other important indicators. Therefore, the market almost never reacts to the index. The growth of index is a positive factor for development of the national economy and leads to an increase in USD.
Significance: Medium
Publication: around the 7th of the month at 3:00 PM (EST)
Source: Federal Reserve
Web: www.federalreserve.gov/releases/g19/current/g19.htm
Consumer price index (CPI)
It represents changes in the level of retail prices for the basic consumer basket. This is the main indicator of inflation. The consumer price index is considered to be more credible when it does not take into account the items of food and energy industries (core CPI). When calculating the index, prices of imported goods, services and taxes are taken into account. It is issued in the form of two types: CPI-U (to assess the impact of inflation on all segments of the population) and the CPI-W (covers only land-based workers and clerks). This index is analyzed along with PPI. If the economy develops in normal conditions, the increase in CPI and PPI can lead to an increase in basic interest rates. This, in turn, leads to an increase in USD as attractiveness of investment in currencies with higher interest rate increases.
Significance: High
Publication: in the middle of the month at 8:30 AM (EST).
Source: Bureau of Labor Statistics, Department of Labor (US)
Web: www.bls.gov/cpi/
Core consumer price index (Core CPI)
Consumer price index is the main indicator of inflation measuring the price changes in goods and services within the fixed basket covering goods and services of the constant demand (food, clothes, fuel, transportation, etc). As prices for food and energy are subject to the greatest changes (such as cyclical and various economic shocks), Core CPI is presented separately. This indicator excludes food and energy (CPI EX FOOD & ENERGY).
Core CPI's growth may lead to an increase in basic interest rates. This, in turn, leads to an increase in USD as attractiveness of investment in currencies with higher interest rates increases.
The indicator is published monthly by Bureau of Labor Statistics on the third week (Tuesday or Thursday) along with the main index of CPI. The main form of release is the value changes against the previous month.
Current account (Balance of payments)
It represents the ratio between the amount of payments received from abroad and the amount of payments going abroad. In other words, it shows the total foreign trade operations, trade balance, and balance between export and import, transfer payments. If coming payment exceeds payments to other countries and international organizations the balance of payments is positive. The surplus is a favorable factor for growth of the national currency. It has a limited impact on the market.
Significance: Medium
Publication: each quarter, in the middle of the month of publication at 10:00 (EST).
Source: Bureau of Economic Analysis, Department of Commerce (US)
Web: www.bea.gov/bea/di/home/trade.htm
Durable goods orders
The indicator is based on a monthly review of 5000 manufacturers, including statistics on production orders of durable goods. Durable goods include products with a lifetime of more than three years, such as cars, furniture, etc. In order to highlight the variability which typical for military and transportation orders, there durable goods orders excluding defense and durable goods orders excluding transportation. This is an important indicator for the market because it provides an indication of the confidence of consumers of these products in the current economic situation. As durable goods are quite expensive, an increase in the number of orders shows the willingness of consumers to spend their own money. Thus, the growth of this indicator is a positive factor for economic development and leads to an increase in the national currency.
Significance: High
Publication: the fourth week of the month at 8:30 AM (EST)
Source: U.S. Census Bureau
Web: www.census.gov/indicator/www/m3/adv/
Employment cost index
It includes wages and unemployment benefits, vacation pay, and insurance. This is one of the indicators which are kept a close eye by the Fed. When there are expectations of an increase in the basic interest rates, growth of its value leads to an increase in USD. It is used for medium and long-term predictions. It is considered to be the most important indicator of inflationary expectations.
Significance: Low
Publication: each quarter, after the 20th of the month at 8:30 AM (EST)
Source: Labor Department
Existing home sales
It includes the number of homes sold in the secondary real estate market during the year. It may represent the optimism of consumers (consumer confidence) and their ability to buy expensive things. These data, because of the real estate market, are subject to seasonal fluctuations. During a recession the demand for property is low, but during the period of growth it is the highest. During the winter it can make significant adjustments to the plans for construction companies. The process of construction is directly related to the population income, thus an increase in the volume of construction represents improvement of their well-being and healthy development of the economy. The level of sales depends on rates on mortgages, but the reaction to the change in rates is delayed for several months. It has a limited impact on the market. The growth of its value has a positive impact on the currency.
Significance: Medium
Publication: around the 20th of the month at 10:00 AM (EST).
Source: National Association of Realtors
Web:www.realtor.org/Research.nsf/Pages/EHSdata
Export prices
The index reflects changes in export prices during the month. It is one of indicators of inflation. It has a limited impact on the market. When there are expectations of an increase in the basic interest rate, growth of value of the index leads to an increase in USD.
Significance: Low
Publication: around the 10th of at 8:30 AM (EST)
Source: Bureau of Economic Analysis, Department of Commerce (US)
Web:www.bls.gov/news.release/ximpim.toc.htm
FOMC Meeting, percent rate
A great influence on stock markets and financial markets is made by meetings of the Fed. That's why attention to changes in interest rates, market transactions of FOMC (Federal Open Market Committee) and statements made by the Fed is so great.
The Fed meetings are held eight times a year. At the meeting there are discussions on the economic situation and monetary policy of the country. Policy documents are adopted and the following is determined: Federal Funds Rate Discount Rate. Final Minutes of the meeting are published in a few days. The decision about changes in rates may be taken between the announced dates of meetings.
Factory orders
Production orders include orders for durable goods (more than 50% of all orders) and short-term goods. The latter includes food, clothes, light industry goods and products that are designed to operate with durable goods. The demand for this type of products from month to month changes slightly as these products are constantly needed for life. Durable goods include products with a lifetime of more than three years. These are automobiles, furniture, etc. The demand for durable goods is reviewed monthly and changes can be quite substantial. This type of products accounts for about 54% of total orders. Basic information on the report is indicated in terms of percentage change against the previous period.
An increase in the value of this indicator represents activity of production and its possible growth, while a decrease indicates contraction of production. Therefore, when there is an increase in this figure the exchange rate of the currency increases. This indicator has a limited impact on the market. Particular attention is paid to trends in its development.
Significance: Low
Publication: first day of the month at 10:00 AM (EST)
Source: Census Department, Department of Commerce
Web:www.census.gov/indicator/
Federal budget
It characterizes the ratio between income and expenditure of the state. When the level of government income is more than expenditures, then there is surplus. If the level of the state spending is more than its income, then there is a negative balance (deficit). This rate has a negligible impact on the market. Usually it is used for a long-term economic analysis and forecast of the exchange rate of the currency.
The budget deficit leads to an increase in public debt and may be a catalyst for acceleration of inflation. There are two ways to solve the problem: 1) to reduce costs, 2) to raise taxes. If the government does not solve the problem of budget deficits, it pushes up inflation and as a result - interest rates.
Budget deficit is examined in the context of other indicators: PPI, CPI, M1, M2, M3, etc.
Significance: High
Publication: around the 20th of each month at 2:00 PM(EST)
Source: Treasury Financial Management Service
Web:www.fms.treas.gov/mts/index.html
Gross domestic product (GDP)
It is the main indicator that reflects the state of the national economy. According to the Keynesian model of economic development, GDP can be represented as the following: GDP = C + I + S + (E - M), where C - consumption, I - investment, S - public expenditure, E - Exports, M - imports. GDP is expressed as an index against the previous period, and in terms of absolute value of sum of the prices of manufactured goods and services. GDP represents the sum of volumes of consumption, investment, government spending, exports and net imports. GDP growth leads to an increase in the national currency. The bond market depends on GDP but security prices vary slightly due to the predictability of GDP based on monthly statistics of its constituents. GDP is the main indicator reflecting the state of the national economy. It has a significant impact on the market. The index value is quite volatile from quarter to quarter cause of which is greater fluctuations in net exports and inventories. Therefore, economists consider the value of sales volume of the end product excluding inventories that represent unsold product, and their growth can greatly increase the value of GDP.
Significance: High
Publication: quarterly at 8:30 AM (EST), around the 20th of the month
Source: U.S. Bureau of Economic Analysis
Web: www.bea.gov/national/index.htm#gdp
GDP deflator
The GDP deflator is an analogue of the consumer price index (CPI) and shows a change in the price levels of all goods belonging to GDP. For calculation of the deflator, a range of goods and services is elected, and this set includes not only the prices for consumer goods and services but also the prices for investment goods, goods and services purchased by the government as well as goods and services traded on the world market. Deflator is an aggregate price index aimed at elimination of price impacts and determination of dynamics of the physical volume of the combined value indicators: GDP as a whole, GDP by economic sectors, GDP by end-use areas, GDP of total income of the state and specific social groups.
Unlike the consumer price index, GDP deflator is not measured on a fixed basket of goods but on the current structure of production. It should be remembered that GDP deflator reflects a different set of goods and services over years, so the deflators of different years are not comparable between themselves. In contrast to the deflator, the consumer price index (CPI) shows the dynamics of cost of the same set of goods and services. That's why it accurately reflects the cost of one set over time.
GDP deflator is published simultaneously with GDP three times - Advanced, Revised and Final. The indicator has a significant impact on the market. When there are expectations of an increase in the basic interest rate, growth of its value leads to an increase in the national currency as well as interest rates.
Significance: High
Publication: quarterly at 8:30 AM (EST), around the 20th of the month
Source: The Bureau of Labor Statistics
Web: www.stats.bls.gov
Help-wanted index
It represents the volume of want ads published in newspapers (51 newspapers). 1987 is the basic year when its value was 100. When it is analyzed moving averages are used. If moving average shows a change in the index tendency during several months, it could serve as a sign of changing situation on the labor market. The index can give an indication about a possible change in the economic situation in different regions of the country. It has no impact on the market. Its influence is limited so that the calculation may include only a limited number of major regional newspapers. If the index value is relatively high, this could mean a shortage of workers, so companies can afford to increase wages to attract new workers that can lead to inflation.
Significance: Low
Publication: the last Thursday of the month at 10:00 AM (EST)
Source: The Conference Board
Housing starts
The indicator shows the number of new houses, construction of which has already begun during the reporting month, and it shows the number of permits for construction. This indicator is very sensitive to changes in basic interest rates as constructions are in need of bank loans. These data are subject to seasonal fluctuations. The process of construction is directly connected with the population income, thus an increase in the volume of construction represents an improvement of their well-being and healthy development of the economy. It has a limited impact on the market. The growth of its value has a positive impact on the currency. If the value varies between 1.5-2 million, the economy is in healthy condition.
Significance: Low
Publication: the third week of the month at 8:30 AM (EST)
Source: U.S. Census Bureau
Web: www.census.gov
Humphrey-Hawkins testimony
It is statements made by the head the U.S. Federal Reserve before the two banking committees of the U.S. Congress. These statements are held twice a year: winter and summer. The two houses of the U.S. Congress switch places on the subject of which committee is the first to listen to the report. The report sheds light on new plans and objectives of the Federal Reserve. It is all the players and try to find a hint at the possible actions the Fed in the future change in the basic interest rates. Speech has a significant impact on the market. This is one of the most important and significant events for the financial market.
Import prices
The index reflects changes in prices for import goods and services per month. It is one of indicators of inflation. As in calculation of the consumer price index (CPI) prices for import goods and services are taken into account this value characterizes the contribution of import prices into overall picture of changes in retail prices for goods and services. It has a limited impact on the market. Despite the fact that the value of this indicator has only a minor impact on the market, a report on import prices is often used by economists to study the pressure which is made by changes in foreign exchange rates on the market. When a national currency is strong, import prices mostly fall. If a certain product, for example, in Japan is 500 yen and the exchange rate is 100 yen per dollar, then in the United States this product will cost $ 5. Therefore, if usd rises against yen, for example, to 120 yen per dollar, it is clear that the price for an import good will fall and it will cost 4.17 dollars. And vice versa, in case of strong dollar against other currencies export prices will fall.
Economists generally pay attention to import prices excluding energy prices. This component is excluded from the calculation because of high volatility of the latter. The dynamics of oil prices is closely linked with the decisions of OPEC, and because these imports do not affect the rate of national currency. If there are expectations of an increase in interest rates, growth of the index leads to an increase in usd.
Significance: Low
Publication: around the 10th of the month at 8:30 AM (EST).
Source: Bureau of Economic Analysis, Department of Commerce (US)
Web: www.bls.gov/mxp/home.htm
Industrial production
It is one of the main indicators reflecting the status of the national economy. The index indicates the volume of industrial production, measures industrial output. It has an impact on all indicators of economic growth, therefore, if the index rises, it means growth of the economy. Growth of production in the industry has a positive effect on the financial markets, leading to higher stock quotes and optimism of investors. In mass media its change against the previous month is usually published. For calculation of the index 2 methods are used:
- direct measurement;
- in cases when direct measurement is not possible, the assessment based on a combination of cost and time consumption of electricity is used.
Publication: in the middle of the month at 9:15 AM (EST).
Web:www.federalreserve.gov/releases/g17/current
ISM index (Institute of Supply Management index)
This index is used to assess changes in new industrial orders, industrial production, employment and the work speed of suppliers. The indicator is calculated monthly on the basis of a survey of several hundred representatives of the productive sector who are members of Manufacturing Business Survey Committee. Answers are based on the comparison of the current month against the previous. Using the questions without any figures, they are asked to answer whether the level of activity becomes "better", "worse" than in the last month, or remains unchanged. The indexes base on these responses show pace and direction of changes for each analyzed activity. ISM includes information on orders, production, employment, material and industrial stocks, time of supply, export and import prices.
The overall index is calculated by weighing five indices: orders - 30% production - 25%, employment - 20%, supply - 15%, material and manufacturing stocks - 10%. The index value of above 50% is considered as an indicator of growth of manufacturing activity, and if less than 50% it indicates slower growth. As a rule, when the index value approaches to 60 investors start to worry about possible overheating of the economy, rising inflation and the Fed rates. Often, the value of this index is influenced by psychological factors than the actual state of affairs. During calculation of the index California is not included. It has a limited impact on the market. The growth of the index results in an increase in USD.
Significance: High
Publication: first business day of the month at 10:00 AM (EST).
Source: Institute for Supply Management (US)
Web: www.ism.ws/ISMReport/index.cfm
ISM services index
It represents the results of a survey of managers of the service sector in order to assess changes in the industry. The value of this index is influenced by psychological factors rather than the actual state of affairs. The process of consumption of services tends to change with a relatively constant speed, so an abrupt change of this index is influenced by psychological factors. During the analysis of the index, special attention is paid to these factors. It has a limited impact on the market. The growth of the index is a favorable factor for an increase in USD.
Significance: Medium
Publication: first day of the month at 10:00 AM (EST)
Source: Institute for Supply Management (US)
Web: www.ism.ws/ISMReport/index.cfm
Jobless claims (Initial claims)
It shows changes in the number of weekly applications for unemployment benefits. This indicator represents the number of the registered unemployed. These figures do not always reflect the real picture of events. They are distorted by short-term factors from time to time, such as state or local holidays. This indicator can give an idea of what figures "Nonfarm payrolls" will show. For example, if during a month the value of the indicator "Jobless claims" consistently decreases, it is likely that the significance of "Nonfarm payrolls" will be great. It has a limited impact on the market. A decline in the number of applications for unemployment benefits is a favorable factor for the growth of USD.
Significance: Low
Publication: Every week on Thursdays at 8:30 AM (EST).
Source: The Bureau of Labor Statistics
Web:www.stats.bls.gov
Leading indicators index
It is a weighted average index of indicators such as "production orders", "number of applications for unemployment benefits", " money supply", "average weekly hours", "building permits", etc. It is believed that it characterizes the development of the economy during the next 6 months. There is also a rule that publication of the value of the index during the previous three months is an indicator of contracting economy. The indicator grows at the average rate of 0.2% during expansion of the economy, but in case of recovery it has the average growth rate of 0.1%, and during recession it falls at the average rate of 0.3%. It should be born in mind that at the stage of growth the average deviation from the value is about 0.8%, and in times of recession is about 1.2%. The main role of the indicator is to predict points of U-turns of cycles.
As the index is made up of other previously released indices it does not bear newness. It has a limited impact on the market. The growth of the index results in an increase in USD.
Significance: Low
Publication: in the first day of each month at 18:00 Moscow time.
Source: TCB's Business Cycle Indicators
Web:www.tcb-indicators.org
Michigan consumer sentiment index
The index represents the results of survey of consumer confidence in the current economic situation. It reflects the willingness of consumers to spend their money.
The index is obtained by a monthly telephone survey of about 500 consumers. Each of them is asked to answer 5 questions regarding their financial position and views on the current status (2 issues) and future (question 3) economy.
The index is almost identical to the consumer confidence index. It is divided into 2 subordinate indexes – the index of expectations and characteristics of current conditions. The index of expectations is a part of Leading Indicators index of Conference Board. The indicator is paid attention by the market. The growth of the index results in an increase in USD.
Significance: Medium
Source: University of Michigan
Web: www.sca.isr.umich.edu
Money supply (M1, M2, M3)
These are indicators of money supply. M1 takes into account the most liquid resources such as cash, traveler's checks. M2 includes M1 and deposits (up to $ 100 000) and other highly liquid savings. M3 includes M2 and long-term deposits. M1, M2, M3 show weekly changes in money supply. The most significant is the M2. It has no impact on the market.
Significance: Low
Publication: every week on Thursdays at 4:30 PM (EST)
New home sales
This indicator shows the number of new homes sold, put up for sale and built by landowners for themselves in terms of one family per year.
This number tends to an increase when the interest rate on loans secured on real estate rises. These data are subject to seasonal fluctuations. Therefore, when analyzing the index moving averages are used. It has a limited impact on the market. The growth of its value has a positive effect on the exchange rate of the national currency.
Significance: Low
Publication: first business day of the month at 10:00 EST
Source: U.S. Census Bureau
Web:www.census.gov/const/www/newressalesindex.html
Nonfarm payrolls
To determine the level of employment in the US statistics two independent features are measured:
- An indicator of establishment employment based on payroll data in the non-agricultural sector (Nonfarm Payrolls);
- An indicator of household employment based on the results of personal interviews (about 60,000 persons) among civilians including agricultural workers and entrepreneurs. A person considered to be the employed is the one who:
- receives a salary during the week and is engaged in his/her own business (self-employed);
- did not work for valid reasons (illness, vacation, labor dispute) but had a job / business.
According to the results of interviews the so-called payroll employment data are formed which represent the index taking into account the average weekly working hours and overtime, and wages. So, it reflects the amount of funds paid by firms in the form of wages. The indicator covers about 500 industries and 340,000 firms, data on payment, and the number of working hours. Nonfarm Payrolls is a lagging indicator which grows faster during expansion than recovery.
Nonfarm payrolls is very strong indicator that shows the change in the level of employment in the country. The growth of this indicator reflects an increase in employment and leads to an increase in USD. It is called the indicator which moves the markets." There is a rule that an increase in its value to 200 000 per month is equivalent to an increase in GDP by 3.0%.
Significance: High
Publication: first days of the month at 1.30 PM (EST).
Source: Bureau of Labor Statistics, Department of Labor (US)
Web: www.bls.gov/news.release/empsit.toc.htm
Oil & Gas Inventories
The report on oil and gas reserves in the United States is included in the weekly statistical report of API (American Petroleum Institute) about the size of supply and demand in the oil industry. Statistics on this indicator has been collecting since 1920.The data are published weekly.
Oil market has the most booming reaction to this indicator and depending on the results of the indicator it shows price increase or decline that affects the situation on the stock market, particularly, the quotations of securities of the oil industry.
Significance: Low
Publication: first Friday of the month at 08.30 AM EST.
Personal income
The index includes the salaries of workers and employees, income from rents, dividends, bank interest, social security outlays, etc. Personal income is a secondary indicator of future consumer demand. It has a limited impact on the market. Changes in this indicator show the status of the purchasing power of the population. The growth of its value can lead to an increase in the volume of retail sales that is a positive factor for the development of the national economy and leads to an increase USD.
Significance: Medium
Publication: around the 20th of the month at 8:30 (EST).
Source: Bureau of Economic Analysis, Department of Commerce (US)
Web: www.bea.gov/national/index.htm#personal
Personal spending
The index reflects changes in spending to meet the individual needs of citizens. It has a limited impact on the market. The index includes three components: the cost of the acquisition of durable goods, short-term goods and services. Retail sales indicator provides data on the consumption of durable and short-term goods. The process of consumption of services, in turn, varies with a relatively constant speed, so the value of this indicator is often predictable. Thus, the only significant deviation of the rate of the projected values may have an impact on the rate of the national currency. The growth of its value is a positive factor for the development of the national economy and leads to an increase in USD.
Significance: Medium
Publication: around the 20th of the month at 8:30 AM (EST)
Source: Bureau of Economic Analysis, Department of Commerce (US)
Web: www.bea.gov/national/index.htm#personal
Philadelphia Fed index
It represents the results of the manufacture survey in Philadelphia to determine their attitude to the current economic situation. The number below the "0" is an indicator of a contracting economy. It has a limited impact on the market. It is kept a close eye on because the index is published before ISM (formerly NAPM) and may give an idea of what the indicator of business activity will be at the national level. The growth of the value of this index leads to an increase in USD.
Significance: Medium
Publication: third Thursday of the month at 10:00 AM (EST)
Source: Federal Reserve Bank of Philadelphia
Web:www.phil.frb.org/econ/bos/bosschedule.html
Producer price index (PPI)
It represents changes in the prices for the "basket" of goods produced in the industry. It measures average changes over time in prices received by domestic producers for their output. The index of industrial prices is considered to be more credible when it does not take into account food and energy industry sectors (core PPI). The PPI is one of the oldest continuous systems of statistical data published by the Bureau of Labor Statistics, as well as one of the oldest economic time series compiled by the Federal Government.
The main groups' contributions are as follows:
- Consumer goods (mainly cars) - 40%
- Food - 23%
- Energy products (mainly gasoline and other fuels) - 14%.
Significance: Medium
Publication: around the 10th of the month at 8:30 AM (EST).
Source: Bureau of Labor statistics, Department of Labor
Web:www.bls.gov/ppi/
Productivity
The index shows changes in the volume of output per one worker. Labor productivity is a very important indicator to assess the status of the economy. It has a significant impact on the market. However, it is necessary to point out that from time to time it may be misleading. For example, a reduction in the number of the employed in manufacturing during contraction of the economy leads to an increase in productivity. This may also occur due to strikes. The growth of the index is a positive factor for the development of the national economy and leads to an increase in USD.
Significance: Medium
Publication: around the 10th of the month at 8:30 AM (EST)
Real earnings
The index is calculated taking into account inflation. To exclude the impact of inflation the calculation is made in relation to the base year (1982). It is expressed in terms of absolute value and an index against the previous period. It can serve as an indicator of the development of inflation.
Significance: Low
Publication: in the middle of the month together with CPI
Redbook
It is a weekly report on retail sales. It represents a review of retail sales of the biggest stores. The first review compares the first week of the month with the first week of the previous month, the second review compares the first two weeks of the current month with the previous month. So, the complete picture is formed only after the publication of the last review. It has no influence on the market because the limited number of stores is engaged in the analysis.
Significance: Low
Publication: weekly on Tuesdays at 10.30 AM (EST)
Retail Sales
The index shows the change in the volume of sales in the retail trade. It characterizes the level of consumer spending and demand. This indicator is divided into sales of cars and sales of "the rest". As the number of cars is a very variable value, so the most correct information is provided by the part of the indicator which does not take into account sales of cars.
The volume of retail sales is included in the GDP formula. The important information in the report on GDP is the percentage change in sales of consumer goods. Shortcomings of the data are as follows: reflection of the cost of acquisition of goods ignoring the purchase of services, and volatility, frequent revisions and difficult forecast.
The growth of the indicator is a positive factor for the economy which leads to an increase in the national currency. The lower-than- expected values are interpreted as a signal to the slowdown of GDP growth, lower inflation, lower interest rates and an increase in the bond market. The high figures leads to back reaction.
Sales are divided into 2 main categories: sales of durable goods (40%) and non-durables (60%). In durable goods vehicles dominate (3/5), the remaining 2 / 5 are composed of construction materials, furniture, household goods. Non-durable goods are consumer goods, food, car fuel, restaurant food, medicines. The growth of retail sales is a positive factor for the development of the national economy and leads to an increase in the national currency. It has a limited impact on the market. The data are collected by the US Census Bureau) through a random survey of retailers across the country.
Significance: High
Publication: in the middle of the month at 8.30 AM (EST)
Source: U.S. Census Bureau
Web: www.census.gov/marts/www/marts.html
Vehicle Sales
This indicator represents the number of cars sold in the United States during the period. The indicator measures the volume of monthly sales of all vehicles produced within the country.
It is an important indicator of the consumer demand as sales of cars accounts for approximately 25% of all retail sales. The demand for them depends on fluctuations in interest rates.
Significance: Low
Publication: in the first three days of each month
Source: Department of Commerce (U.S)
Web:www.census.gov/compendia/statab/cats/wholesale_retail_trade/motor_vehicle_sales.htm
