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Consumer Price Index (CPI)
Bureau of Labor Statistics, U.S. Department of Labor (DOL)
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Producer Price Indexes
Bureau of Labor Statistics, U.S. Department of Labor (DOL)
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Overview of BLS Statistics on Employment
Bureau of Labor Statistics, U.S. Department of Labor (DOL)
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Industry Statistics (energy)
American Petroleum Institute (API)
(Adobe PDF files)
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U.S. Energy Information Administration - EIA
U.S. Department of Energy (DOE)
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Housing Data
National Association of Home Builders (NAHB)
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ABI News and Graphs
Economic Conditions,
The American Institute of Architects (AIA)
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AIA Architecture Billings Index (ABI)
Practicing Architecture, Economics,
The American Institute of Architects (AIA)
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Consensus Construction Forecast
Practicing Architecture, Economics,
The American Institute of Architects (AIA)
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Construction Spending
Manufacturing, Mining and Construction Statistics,
U.S. Census Bureau,
Economics and Statistics Administration
(ESA),
U.S. Department of Commerce
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New Residential Construction (Building Permits,
Housing Starts, and Housing Completions)
Manufacturing, Mining and Construction Statistics,
U.S. Census Bureau,
Economics and Statistics Administration
(ESA),
U.S. Department of Commerce
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HAVER ANALYTICS®
Haver Analytics
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U.S. Economy at a Glance
Bureau of Labor Statistics, U.S. Department of Labor (DOL)
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Australian Bureau of Statistics (ABS)
Australian Government
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World Economic Outlook Reports
International Monetary Fund (IMF)
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World Economic Outlook Update
International Monetary Fund (IMF)
[ 17 June 2011 ]
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World Economic Outlook (WEO)
International Monetary Fund (IMF)
[ October 2010 ]
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Ten Odd Economic Indicators: Hot Waitresses,
Men’s Underwear,
Blacked-Out Football Games,
and More
Brad Tuttle, Moneyland,
Time, Inc. [ 25 September 2009 ]
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Because the economy is the key driver of investment activity, it is
imperative that, as an investor or trader, you keep a close eye on
economic indicators, which are simply vehicles by which the
condition or vibrancy of an economy is measured. For a trader,
a single economic report can turn a good trade instantly bad or save a
potentially failing trade. For an investor, waning economic indicators
may presage a significant downturn in the markets; conversely,
improving economic indicators in a bottoming market can signal an
important buying opportunity.
Economic indicators are absolutely essential in order to monitor the state of a modern economy,
to plan and formulate economic policy, and to make financial and investment
decisions ranging in scope from international right down to the personal
level. Without knowing the existing condition of an economy, that
economy would function only in a state of uncertainty, subject to
widespread instability and frequent financial panics. Interest rates would
remain stubbornly high, if lending took place at all, because lenders could
not know whether economic conditions might change suddenly for the worse,
leaving borrowers unable to repay loans. Currency could not be properly
valued, leaving the barter system as the only viable alternative for
exchanging goods and services. While basic agrarian economies can function
in this manner because they are non-specialized and self-sustaining
(A farmer is, by nature and by necessity, self-reliant.), advanced
manufacturing societies cannot because the cost of resources (raw
materials) and the cost of the finished product must correspond to one
another in a consistent relationship over time in order for business
transactions to be routinely and equitably consummated.
Economic indicators are compiled by a wide variety of agencies, both
governmental and civilian, to illuminate virtually every aspect of an
economy. While many economic indicators are publicly available,
some are compiled by financial institutions either for in-house use or for
proprietary use by clients. Still others may be derived and maintained by
educational institutions such as universities or think-tanks as research
projects; these may be made public (in part, to enhance the reputation
of the institution as caretaker of the indicator) or may be
reserved for use by other researchers. Economic reports may comprise
hard data (statistics), soft data (consensus and estimate),
opinion polls, or a combination of these data types.
A major problem with economic indicators is their inherent tendency toward
inaccuracy on a short-term basis. Economic reports of all types are
frequently revised at a later date by the agencies responsible for
their compilation. An economic report should always be viewed with a
grain of salt; when analyzing the data, the trend
is usually what is most important. Another critical factor is the
measurement process itself; a classic example is U.S. Government
unemployment statistics, which fail to take into account
discouraged workers (i.e., persons of
legal employment age who are not actively seeking employment), thereby
undercounting the true number of unemployed within the workforce. It is
often enlightening to dig down into an economic report, examining
data subsets to see exactly what combination of factors have led to the
overall result.
Traders need to anticipate how a particular indicator may play out in the
market and read between the lines once the data is actually
disseminated. It can be extremely dangerous to enter a trade ahead of
the release of important economic news; the best course to pursue
is often to wait until market action is confirmed. Some pitfalls
associated with trading on economic data include the following:
- Initial market reaction to important data can be rapid and violent,
making it necessary to either chase a trade or abandon
it;
- The initial market response to economic data is often a knee-jerk
reaction subject to reversal once the substance of the economic
report is digested by more patient and savvy traders and
investors;
- Markets may place differing emphasis on a particular set of data
depending upon other factors such as coincident or supporting data
and the state of the markets as a whole;
- Large investors or institutions may pre-position large buy
or sell orders to take advantage of market movements resulting from
a data release, thereby creating a market reaction opposite to that
which would normally be expected;
- Multiple economic reports issued in a near-coincident timeframe may
present a conflicting view of economic activity, thereby
muddying the waters for trader and investor alike;
- Economic indicators which ordinarily affect only a narrow range of
markets may at times have a spillover effect which can
affect other markets.
Suffice it to say that trading is never easy. Trading on economic data
can present tremendous opportunities, but may also lead to staggering
losses if the data do not support your premise and, consequently,
the trade does not go your way.
For investors, the wait and see approach becomes even more
important than for traders. An investor should never rely upon a single
data point within a given economic indicator to determine an investment
decision. Most indicators have the capacity to fluctuate wildly
from one data point to the next, requiring examination of a smoothed
average to gain a clear picture of the true trend. Comparisons can also
be misleading. Some indicators require quarterly or seasonal adjustment
to reveal significant changes or deviations. At times, exogenous
influences can distort the numbers, such as the effect the Congressional
“cash for clunkers” stimulus program had on U.S. auto sales.
Economic indicators, then, are used to measure the health of an
economy and should be a key component of your financial arsenal in
order to achieve consistent and successful investment or trading results.
Economies are not static; they ebb and flow in distinct cycles of
expansion and contraction (recession). The beauty
of economic indicators is that they can be used to discover trends that
reflect these cycles. Employed properly, economic indicators can
assist you in periodically reallocating your investment portfolio or
realigning your trading strategies to achieve maximum return on
principal.
Authored by Kenneth L. Anderson.
Original article published 13 November 2009.
Follow links to the right to learn more about a number of important
U.S. economic indicators, economic statistics and labor statistics,
including Consumer and Producer Price Index and information from the
Bureau of Labor Statistics.
At the left margin, Related Links address topics of interest
pertaining to information, resources and services for investing and trading in the stock, bond, commodity and
real estate markets. View the
Stock & Bond Investing SiteMap
for a complete list of stock, equity and bond investing topics.
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