The
Current Employment Statistics provide an in-depth look at
employment, unemployment, hours and wages for workers on
U.S. non-agriculture payrolls. The data are compiled from
a monthly survey of 300,000 businesses representing hundreds
of industries.
Who releases
it??
The Bureau of Labor generally releases the information
on the 1st Friday following month-end. |
The
bottom line?? The employment report is one of the most
widely watched economic indicators. This is due in part
to the report’s timely release, but mainly to the
fact that employment drives consumer spending. Low employment
numbers can spur the Fed to lower interest rates, while
very high employment figures can signify an overheated
economy and potential inflationary pressures.
The employment numbers make the news, but he report also
contains other important data. For example, high overtime
numbers can indicate that companies may soon be hiring
more people. Data on job growth and on which sectors gained
or lost jobs can also provide clues to future economic
trends.
Retail
trade and food services sales
If you’re like most Americans, chances are you’ve
eaten out at least once in the past week. You may have
also filled your car with gas, gotten snacks from a vending
machine or ordered books online. All of these purchases
will factor into monthly retail and food services sales
figure, which give economists an early glimpse at how
much consumers are spending.
This
data track monthly sales for a variety of retail and food
services industries, including automotive dealers, general
merchandise, home furnishings and building materials and
hardware stores. While you hear a lot about department
store sales, they only account for 10% of retail trade.
Who
releases it?? The U.S. Department of Commerce’s
Census Bureau polls 5,000 randomly sampled retail and
food services firms each month. They weight and benchmark
these figures to represent more than 3 million U.S. retail
and food services establishments and then release the
date midmonth.
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The
bottom line?? Consumer spending — which includes retail
sales and services — makes up nearly 70% of the GDP.
Although retail and food sales don’t include a number
of services purchased by consumers, the data is an important
early measure of how consumers are faring.
Producer Price Index
One of the reasons a gallon of milk no longer costs a dime
is because the cost of producing milk has increased over
the years. When the costs of property taxes, cattle feed
and farm workers’ wages rise, so does the price of
milk. The Producer Price Index (PPI) measures price changes
at the earliest level, from the producer’s perspective.
The PPI is a group of indexes that measures the average
change in selling prices received by U.S. producers of goods
and services. It captures price movements for almost every
goods-producing sector: agriculture, forestry, fisheries,
mining, scrap and manufacturing . I has recently started
to include non-goods producing sectors such as transportation,
real estate and legal services.
Who
releases it?? The Bureau of Labor Statistics releases the
index during the second week following the reference month.
The
bottom line?? The PPI’s early release makes it the
first measure of inflation every month. Just as they focus
on the “core” CPI, analysts often examine the
“core” PPI, which removes the volatile food
and energy components. The Fed uses this data to help formulate
monetary policy.
While
most analysts look at producer prices to help them forecast
what will happen to consumer prices, the relationship between
the PPI and CPI is not always that simple. The PPI can sometimes
give you an early read on the CPI, but producer price increases
are not always passed on to the consumer. For example, steel
prices can rise dramatically, but due to competitive forces,
automakers won’t always be able to raise car prices
very much per one expert. |
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Housing
Starts
As a homeowner, you’ve seen the value of your house
rise dramatically over the past few years, thanks to record
low interest rates and a tight housing market. The recent
high demand for real estate resulted in a jump in housing
starts, which provided another way for economists to gauge
the health of the economy.
Housing
starts report the number of new residential construction
projects—both single-family homes and multifamily
buildings—on which building has begun. Related indicators
are new home sales, housing completions and the number of
building permits issued.
Who
releases it?? The U.S. Department of Commerce’s U.S.
Census Bureau releases the data 2 to 3 weeks after the end
of the referenced month.
The
bottom line?? The bottom line:
Both building permits and housing starts have been fairly
accurate leading indicators of economic recessions and recoveries,
since a rise or fall in interest rates often affects them
before affecting the overall economy. Weather can seriously
affect housing figures, so the monthly data are very volatile
and subject to subsequent revisions. Instead of focusing
on the monthly figures, analysts watch for longer term trends
in housing. Some economists, prefer to look at housing sales
because they can be more timely. Sales affect the demand
for housing-related goods, so they can give economists a
sense of where sales of furniture and appliances may be
going.
Even
in the investment community, there’s much debate about
which indicators are relevant.
Although
economic indicators can help pro-vide a glimpse into future
economic trends, they are just a few of many factors that
analysts examine when making investments decisions - in
real estate or in the stock market.
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