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Fundamental Economic Reports: Medium Market Movers !!

Durable Goods Orders

  • Importance: !!
  • Source: The Census Bureau of Department of Commerce.
  • News Announcement Time: 8:30 EST around the 26th of the month (data for prior month).

Durable goods orders track dollar amounts for orders, shipments, and backlog. These cover items lasting three years or longer. People see them as an early sign of factory output.

Conference Board Measures Consumer Confidence

  • Importance: !!
  • Source: The Conference Board.
  • News Release/Announcement Time: 10:00 EST on the last Tuesday of the month (data for current month).

The Conference Board conducts/carries out a monthly survey of 5,000 households to figure out the level of consumer confidence. The report can occasionally be helpful in predicting sudden shifts in consumption patterns, though most small changes in the index are just noise. Only index changes of at least five points should be considered significant.

Industrial Production

  • Importance: !!
  • Source: Federal Reserve.
  • News Report Announcement Time: 9:15 ET around the 1fifth of the month (data for month prior).

The index of Industrial Production is a way to measure the real output of factories in a country, mines, and utilities, using set values. Knowing manufacturing output, the biggest part of the total, is easier if you know total manufacturing hours worked from the jobs report.

Initial Jobless Claims

  • Importance: !!
  • Source: The Employment and Training Administration of Department of Labor.
  • News Announcement Time: 8:30 EST each Thursday (data for week ended prior Saturday).

Initial jobless claims measure and estimate the number of registrations for state jobless benefits(the number of people out of jobs). This report provides a timely, but often misleading, indicator of the direction & momentum of the economic environment, with increases (decreases) in claims potential signaling/signifying slowing (accelerating) job growth.

This report includes two more stats: people on state benefits and the insured unemployment rate. Markets pay little attention to either. Some experts watch benefit recipients month by month to gauge job growth. Yet this data rarely predicts the monthly jobs report well. The insured rate stays steady week to week and never sways the market.

International Trade

  • Importance: !!
  • Source: The Census Bureau and the Bureau of Economic Analysis of Department of Commerce.
  • News Report Announcement Time: 8:30 EST around the 20th of the month (data for 2 months prior).

The trade report is most widely watched for trends in the overall trade balance. But trends in both exports & imports of goods and services bear watching as well. The export data in particular are crucial to watch for signals that a strengthening and competitive position at home &/or competitive economies overseas are boosting the USA economy Growth. Imports data provides an indication of domestic demand, but given the severe lag of this report relative to other consumption indicators, it isn't particularly very valuable for analysis purpose.

The volatility in the monthly trade balance can play an important role in GDP forecasts. Net exports are a relatively volatile component of GDP, & the trade transaction report provides and gives the only early clue to the net export performance each quarter.

Producer Price Index - PPI

  • Importance: !!
  • Source: Bureau of Labor Statistics, U.S. Department of Labor.
  • News Announcement Time: Around the 11th of each month at 8:30 EST for the previous month.

The Producer Price Index, or PPI, measures how much goods cost at the wholesale level. It breaks down into three big groups: crude, intermediate, and finished. Most people pay attention to the finished goods index because it shows what prices look like for stuff that's ready to hit the shelves.

University of Michigan Consumer Sentiment Index.

  • Importance: !!
  • Source: The University of Michigan.
  • News Release/Announcement Time: Preliminary: 10:00 ET on the second Friday of the month (data for current month): Final: 10:00 ET on the fourth Friday of the month (data for current month).

The Michigan index matches the Conference Board Consumer Confidence index closely. It releases two versions each month: preliminary and final. Like the other, it has sub-parts for expectations and current conditions. Expectations feed into the Conference Board Leading Indicators.

Institute for Supply Management (ISM) tracks national manufacturing conditions. It started as NAPM. The name changed in January 2002. The ISM index blends various diffusion measures.

Values over 50% point to a growing factory sector. Traders must track economic trends closely. These shifts guide how various investments fare.

By tracking economic data, such as the ISM report, traders gain insights into market conditions. The ISM provides a detailed analysis of the manufacturing sector, its activity levels, and future projections.

Since the manufacturing sector is a primary driver of economic cyclical fluctuations, reports from this area carry substantial market impact. Furthermore, several sub-indexes published by the ISM offer insights into commodity pricing and preliminary indications regarding potential inflationary development.

The Federal Reserve tracks this data closely. It shapes interest rate choices when inflation appears in reports.

Leading IndicatorsLeading Indicators - A composite index of 10 economic reports/indicators that typically lead overall economic activity.

Traders and investors must watch the economy closely. It shapes how investments do.

By keeping track of economic stats like the leading indicators index, traders can understand the economic situation for all the different markets that exist.

The Leading Indicators index is aimed at forecasting changes in the economy, such as recessions and recoveries. Interestingly, stock prices are included as one of the primary technical indicators within this index.

Import and export prices - This metric refers to the costs associated with goods brought into the United States that were manufactured overseas, alongside the revenues generated from goods sold internationally that were produced locally within the domestic economy.

Price changes in internationally traded products reflect inflationary trends. Fluctuations in import and export prices serve as an essential measure of inflation both locally and globally. Additionally, news reports can significantly influence financial markets, including bonds and the dollar.

Rising inflation typically leads to an escalation in interest rates, which negatively impacts equity markets (stocks/shares). By keeping track of inflation indicators, such as import pricing data, investors can monitor this adverse factor for their investment portfolios.

IFO Business Climate in industry and tradeIFO Business Climate in industry & trade - IFO Business Climate Index is a-widely early indicator for economic development in Germany. Every month the IFO Institute surveys more than 7,000 enterprises in west and east Germany on their appraisal of the business situation/environment (good/satisfactory/poor) and their expectations for the next six months (better/same/worse).

The replies are weighted in accordance to the importance of the industry & aggregated. The percentage shares of the positive and negative responses to both questions are balanced & a geometric mean average is shaped and formed from the balances divided according to east and west Germany. The series of balances thus derived are linked to a base year (currently 1991) & seasonally adjusted.

APICS Survey: It measures U.S. manufacturing conditions with a composite index. The survey reviews the sector in depth.

This survey is less well known that the ISM, but also can indicate trends in production. The diffusion index does not move in tandem with the ISM index every month, but sometimes the 2 do move in the same direction.

Manufacturing plays a big role in the economy. Traders use it to gauge the broader setting for investments. A reading of 50 shows no growth. Each 10-point rise points to a 4% increase in manufacturing output.

Beige Book - Since 1970, banks within districts have been producing summaries that reflect the economic conditions in their areas. Initially, this Red Book was created solely for policymakers and was not meant for the general public.

It was released to the public in 1983. To show this change, the color of the cover was changed, and people started calling it the Beige Book.

Beige Book is released 2 weeks before each FOMC meeting eight times a year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its district through reports from bank and branch directors and interviews with key businessmen, economists, market experts, industry experts & other sources from the various sectors of the district economy.

The Beige Book pulls together info from districts. It gives a broad view of reports from all 12 areas. One Federal Reserve Bank, picked on a rotating schedule, reviews and sums them up. People see this report as a clue to Fed moves at the next meeting.

Blue Book Report: Following the release of the green book, FOMC members receive the blue book. All blue books contain the Board staff's assessment of monetary and financial conditions relevant to the meeting timeframe, covering several preceding months. Each book begins with a review of recent activity in key policy metrics, including the Federal Funds rate, reserve estimations, and monetary aggregates. Additionally, the blue book outlines two or three potential policy pathways for the period between meetings. The versions prepared for the February and July meetings feature two supplementary sections designed to aid the Committee in preparing for the Humphrey-Hawkins testimony. The initial supplementary section provides long-term projections, projecting five or six years ahead. This part also furnishes calculations on how different assumptions regarding factors like fiscal policy, the natural rate of unemployment, or how quickly inflationary expectations adjust would influence the projected outcomes. The second extra section in the February and July blue books details alternative annual targets for the growth of monetary aggregates.

The Red Book, released every Tuesday, furnishes a detailed account of sales from approximately thirty US retail stores for the preceding week, presenting a comparative analysis against the prior month. It functions as a forecast concerning household demand but should be viewed as a relatively volatile metric, considering the seasonally significant months for retail operations.

Business inventories refer to the total dollar value of goods held by manufacturers, wholesalers, and retailers. The balance between inventory levels and sales serves as a crucial fundamental indicator for forecasting short-term production activity trends.

Investors and traders should keep a close eye on economic trends, as these largely determine the performance of various investments. A rise in inventories can signal business optimism regarding increased sales in the near future.

By examining the ratio of inventories to sales, investors can tell if production needs will increase or decrease soon. The business inventory information is a helpful tool for predicting future economic conditions.

Chain store sales track monthly volumes from big shops like department, discount, and clothing stores. Retailers report them. These figures show retail activity and consumer spending.

Consumers drive two-thirds of the economy. Track their habits to predict economic shifts.

Sales are shown as how much they've changed since the same month last year. To understand this year's sales, it's important to know how good the sales were a year ago. Also, sales are usually reported for similar stores if companies join together.

Consumer sentiment reflects survey data about consumers' views on current conditions and future expectations regarding the economy. The University of Michigan conducts this comprehensive assessment.

Each month, surveys reach five hundred consumers. Consumer sentiment ties straight to spending drive. Spending makes up two-thirds of the economy. Markets always track what consumers do next and how they might act soon.

Increased consumer confidence regarding economic stability and personal finances correlates directly with a greater propensity to spend. Consequently, the consumer sentiment index serves as an accessible barometer, offering insight into the current condition of the broader economic environment.

Fluctuations in consumer sentiment and retail sales do not align consistently from month to month.

The current account is a way of measuring how well a country is doing in international trade of physical items, services, and one-way payments. How the current account is doing, along with how exports and imports are trending, are watched to understand foreign trade trends.

Records of U.S. trade activities with international partners offer vital insights into economic momentum both domestically and abroad. This data holds the potential to directly influence all facets of financial trading markets, particularly the exchange value of the dollar in forex.

Factory ordersFactory orders - Dollar level of new orders for manufacturing durable goods & nondurable goods. It provides more complete info than durable goods orders which are reported 1 or 2 weeks earlier in the month.

The durable goods orders report provides insight into factory activity for the upcoming months as manufacturers fulfill production demands. It reflects demand for durable items like cars and refrigerators as well as nondurable goods like clothing and cigarettes.

In addition to tracking new orders, analysts scrutinize unfilled orders, which serve as an economic barometer for the production pipeline backlog. Shipments reflect current sales activity, while inventory levels provide insight into the strength of current and prospective output.

This report provides insights into the manufacturing sector, a key component of the economy, offering traders a perspective on potential impacts on their investments.

Green Book - The Green Book is created by the staff at the Board of Governors five days before an FOMC meeting. It gives the staff's views on different economic and financial factors and is split into two parts.

The green book's first part covers key US economic changes. It looks at activity, prices, interest rates, money flows, credit, and global sectors from recent months or quarters.

This part forecasts key data for the next 6 to 8 quarters. The green book also covers recent updates.

It covers trends in prices, output, and employment, as well as the variables and factors that affect them. Additionally, this chapter offers sector-by-sector analyses of topics including housing, automobile manufacturing, inventories, and government expenditures at the federal, state, and local levels.

This feature provides a comprehensive analysis of various activities in domestic financial markets, encompassing trends in credit operations for banks, non-financial organizations, other financial intermediaries, and consumer behavior insights.

In the end, global events get a close look and breakdown. This covers notes on trade data, cross-border money flows, forex markets, and economic moves in several overseas nations.

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