Economic indicators are statistics about the economy which give us a perspective on how the economy is doing right now and a glimpse of where it could be heading into the near future. Depending on the health of the economy, as given by the indicators, investors choose the timing of their investments. If these statistics indicate tough times ahead for the economy, some investors might shy away from investing in the short-term till the economy starts showing signs of improvement.
The most popular economic indicators are as follows:
The Jobs/Employment Report –
On the basis of the results of two surveys – the Household Survey and the Establishment Survey – the employment report gives the unemployment rate figures for the previous month. These statistics are released at 8:30AM EST of the first Friday every month.
Consumer Price Index (CPI) –
This statistic is a interpreted as a measure of the price levels of goods and services purchased by consumers. It is regarded as the best measure of the rate of inflation in the U.S. The CPI figures for the previous month are released at 8:30AM EST around the thirteenth of every month.
Gross Domestic Product (GDP) –
This statistic comprises of several components such as the consumption, investment, net exports, government acquisitions, and inventories. These figures for the previous quarter are released at 8:30AM EST on the third or fourth week of the first month of the new quarter. These figures are revised in the second and third months of the quarter.
Housing Starts And Building Permits –
These are two separate measures. Housing starts is a measure of the number of residential units on which construction started the previous previous month. The word ‘start’ in this context is defined as the excavation of the foundation for the building (which is used primarily for residential purposes). Since building permits are not required in all states before beginning construction its important to pay more attention to the Housing start measure. The figures for the previous month are released at 8:30AM EST around the sixteenth of each month.
National Association of Purchasing Managers (NAPM) –
The NAPM report is a weighted average of the items including new orders, employment, production, inventories, prices, and import and export orders. This statistic primarily covers the manufacturing sector but is considered a leading indicator for other economic statistics. The figures for the previous month’s data are released every month at 10AM EST on the first business day of the month.
Producer Price Index (PPI) –
The PPI, another measure of inflation, measures the price of goods at the wholesale level. The figures of the previous month are released at 8:30AM EST around the eleventh of the month.
Retail Sales –
The retail sales number is a measure of the total receipts from retail stores. This is usually less than half of the total personal consumption figures because it excludes money spent on services. The figures for the previous month are published at 8:30AM EST around the thirteenth of every month.
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