NOTES ON THE “SECRETS OF ECONOMIC INDICATORS”
By Don Gimpel based on a book by Bernard Baumohl
TABLE SET 1: INDICATORS BY CLASSIFICATION
ECONOMIC DATA
INTERNET ADDRESS
OTHER
Note 2
SCHEDULE OF RELEASES OF ECONOMIC INFORMATION
Economic release catalog http://money.cnn.com/markets/IRC/economic.html B
Economic release catalog
www.nber.org/releases/
B
Economic release catalog
http://fidweek.econoday.com/
B
ECONOMIC NEWS
News
www.bloomberg.com/news/
B
News
News
http://money.cnn.com/news/economy
http://cbs.marketwatch.con/news/
B
B
News
http://news.yahoo.com/fc?tmpl=fc&cid=34&in=b
usiness&cat=us_economy
B
ECONOMY, US
Economic Indicators,
Leading, Coincident and
Lagging
GDP, historical data
www.globalindicators.org/us/latestreleases/
NOTES
Note 1
B
Bonds, Stocks and $: Little or no effect. Page 168
http://research.stlouisfed.org/fred2/categories/18
GDP, most recent report
www.bea.gov/bea/rels.htm
B
Bonds: if growth<expected growth is a plus. Stocks:>3.5%
is a minus, <3.5% is a plus. $: growth is a plus and inflation
is negative. Page 115
Industrial Production and
Capacity Utilization
www.federalreserve.gov/releases/g17/current
B
Bonds: Sells off on jumps when Cap. Util.>80%. Stocks: rising
is positive for stocks. $: modest reaction to moves. Page 146
1
Inventories, Business,
(Manufacturing and Trade
Inventories and Sales)
Non-manufacturing
(service) activity from the
Orders, Durable Goods,
Advance Report
Orders, Factory
(Manufacturers’
Shipments, Inventories and
Orders)
Purchasing Managers
Report, Chicago, NAPM
www.census.gov/mtis/www/current.html
B
Recessions and
Expansions, dates and
lengths
Supply Mgmt.
Manufacturing Survey
(ISM)
www.nber.org/cycles.html/
Academic interest only.
www.ism.ws/ismreport/index.cfm
Bonds: If >50 bearish, <45 is bullish. Stocks: Up if
trending up. $: moves up if >50Page 153
www.ism.ws/ISMReport/index.cfm
Bonds: Faster than expected growth is negative for bonds.
Stocks: No significant effect. Page 136
Bonds, Stock and $: No real effect Page 156
www.census.gov/indicator/www/m3/adv/
B
www.census.gov/indicator/www/m3/adv/
B
Bonds: Surprises are negative. Stocks: growth is a plus if
CU<84%. $: growth is a plus. Page 122
Bonds: Prices up on weakening economy. Stocks: inch up on
strengthening. $: unaffected. Page 129
www.napm-chicago.org
CONSUMER BEHAVIOR
Bankruptcy Filings,
www.abiworld.org/template.cfm?section=news_ro
Personal & Business
om
Consumer Comfort
Index, ABC
News/Money Magazine
http://abcnews.go.com/sections/us/PollVault/Poll
Vault.html
Bonds, Stocks and the $: No response. Page 96
Consumer Confidence,
Conference Board
www.conferenceboard.org/economics/consumerConfidence.cfm
Bonds: sharp increase negative. Stocks and $: declines
negative. Pg 90
Consumer Sentiment, U.
Of Mich.
Debt, Consumer
www.sca.isr.umich.edu/main.php
Debt, Consumers
Handling (Cambridge
Consumer Credit Index
www.cambridgeconsumerindex.com/index.asp?co
ntent=survey
Bonds: advance is a negative, Stocks: advance is a positive, $:
no effect. Page 99
Bonds: jump gives upward pressure on interest rates. Stocks
and $: little effect. Page 79
Bonds, Stocks and $: little effect. Page 85
www.federalreserve.gov/releases/g19
2
Debt, Credit Card
Delinquencies
www.aba.com/press+room/pr_releasesmenu.htm
Debt, Household
www.federalreserve.gov/releases/housedebt/defaul
t.htm
Earnings, Real
www.bls.gov/bls/newsrels.htm
Bonds, Stocks and the $: Not sensitive to real earnings. Page
288
Income and Spending,
Personal
www.bea.doc.gov/bea/newsrel/pinewsrelease.htm
Investor Confidence
(UBS Index of Investor
Optimism
Sales, Chain Store,
Weekly
www.ubs.com/investoroptimism
B
Bonds: positive on sluggish growth, gains are negative while a
jump may lead to sell-off. Stocks: higher personal income
positive except on strong economy. $: goes up on increase.
Page 61
Bonds: up is negative and for Stocks: up is positive. $: no
effect. Page 99
www.chainstoreage.com
B
Sales, Retail
www.census.gov/svsd/www/advtable.html
Purchasing Managers
Index, Chicago
Sales, Retail, ECommerce
www.napm.chicago.org
Bonds: strong slaes make bond traders nervous. Stocks:
generally positive on rise. $: no reaction. Page 74.
Bonds decline on increasing sales, Stocks advance. $
declines on jumps. Page 66
Bonds: Upsurge causes bonds to fall. Stocks: Little effect, $:
Little effect. Page 160
Bonds, stocks and $: little reaction. Page 69
www.census.gov/mrts/www/current.html
EMPLOYMENT CONDITIONS
Employment Situation
http://stats.bls.gov
B
Help wanted advertising
www.conferenceboard.org/economics/
B
Layoffs, mass
www.bls.gov/mls
Unemployment
Insurance, weekly claims
www.ows.doleta.gov/unemploy/claims_arch
Bonds sell of on surge particularly when Casp. Util>80%,
When weakening is Bullish for Bonds. Robust employment
is positive for bonds. High employment drives interest rates
up. Page 37
Little or no impact. Page 44
Jump in layoffs bullish for Bondx. Page 46
B
Claims jump>30,000/week positive for Bonds. A drop leads
to lower bond prices. Persistant increases lead to down
markets. $ declines on rising claims. Page 41
3
HOME SALES AND CONSTRUCTION
Affordability Index,
www.realtor.org/research.nsf/pages/housinginx
Home (National Assn. of
Realtors)
Housing Market Indexwww.realtor.org/research.nsf/pages/ehsdata
Builders perception of the
curren and future market
for new single-family
homes (NAHB)
Housing Starts
www.census.gov/const/www/newresconstindex.ht
ml
Bonds, Stocks and $: Little or no impact. Page 190
B
Mortgage Applications,
weekly (Mortgage
Bankers Assn.)
www.mortgagebankers.org/newsar
Sales, Existing single
family
www.census.gov/
Sales, New Home
www.census.gov/const/newressales.pdf
B
Spending, construction
www.census.gov/c30
B
INTERNATIONAL TRADE
Current Account Balance www.bea.gov/bea/rels.htm
Prices, Export and Import
Trade, International
www.bls.gov/mxp
www.bea.gov/bea/newsreel/tradnewsrelease.h
INFLATION PRESSURES
Employer Costs for
www.bls.gov/
Employee
Compensation
Bonds: Good news is bad news for bonds. Stocks: Weakness
is alarming, strength is positive. $: Strong housing report is
bullish. Page 173.
Bonds: Surges might cause a sell-off.
Bonds: little reaction unless CU > 83. Jumps scare bond
buyers. Stocks: Strong report helps stocks. $: Strong sales
help the $. Page 180.
Bonds: High impact if near peak or trough of economic cycle.
Stocks and $: little effect. Page 185
Bonds, Stocks and $: Little impact. Page 196
Bonds and Stocks: Little impact. $: A deficit will lower value
of the dollar while a surplus is highly bullish. Page 244.
Bonds, Stocks and $:No great impact. Page 273
Bonds and Stocks: Tricky to interpret. $: Improvement in
trade balance is davorable. Page 236
Bonds, Stocks and the $: Little impact. Page 285.
4
Employment Cost Index
www.stats.bls.gov/news.release/eci.toc.htm
B
Inflation effect on the
dollar
http://woodrow.mpls.frb.fed.us/research/data/us/cal
c/hist1913.cfm
B
Inflation Effect on the
Dollar
Inflation, US to 1800
www.eh.net.ehresources/howmuch/dollarq.plp
B
Inflation, US, Historic
Rates from 1913
http://woodrow.mpls.frb.frd.us/research/data/us/cal
c/hist1913.cfm
Price Index, Consumer
(CPI)
www.bls.gov/cpi/
B
Price Index, Producer
(PPI)
www.bls.gov/ppi/
B
Productivity & Costs
www.bls.gov/lpc/
http://woodrow.mpls.frb.fed.us/research/data/us/cal
c/hist1800.cfm
FEDERAL RESERVE SURVEYS
Beige Book
www.federalreserve.gov/frbindex.htm
Chicago
Kansas City
New York
Bonds: A larger than expected jump upsets bond investors. A
stable or week ECI is positive for the bond market. Stocks:
Increase in labor costs is bearish. $: No pattern.
www.chicagofed.org/eonomic_research_and_data/d
ata_index.cfm
www.kc.frb.org/mfgsurv/mfgmain.htm
www.ny.frb.org/research/regional_economy/empire
survey_overview.html
Bonds: A jump cuts bond values and raises yields. A
benign report is bullish. Stocks: Sharp increases are very
negative. $: Inflation lowers value of the dollar (and raises
the value of gold). Page 254
Bonds: A jump in the PPI is a leading indicaor of CPI
inflaion and is important because of its early release.
Stocks: Reaction is similar to that of bonds. $: response
may go up or down depending on other conditions. Page
361..
Bonds and Stocks: No real significance. $: Gains in
productivity increase US competitiveness. Page 281.
Value summary of US Economy. Bonds: Any softening of
economy is bullish. Stocks: Softening with little inflation is a
positive for stocks. $: If up and confirmed by other indicators,
it may help the $. Page 222.
Bonds, Stocks and $: Little effect. Page 218.
Bonds: Upside surprises make investors edgy. Stocks and $:
No effect. Page 212
Bonds: NY Report is timely, modest growth helps bond
prices. Stocks: Weakness has negative effect. $: No effect.
Page 203
5
Philadelphia
Richmond
www.phil.frb.org/econ/bos/index.html
www.rich.frb.org/research/surveys/
FEDERAL BUDGET
Current Projections
www.cho.gov/
Proposed Budget
www.whitehouse.gov/comb/budget
INTEREST RATES
Mortgages
www.bankrate.com/brm/rate/avg_natl.asp
Federal Funds and
Treasury Sec., Historical
rates
Federal Funds and
Treasury Sec. Current
rates
Federal Funds and
Treasury Sec., Current
rates
Bonds, Stocks and $: Little effect.
Bonds, Stocks and $: Little effect. Page 214
B
www.federalreserve.gov/releases/h15/data.htm
www.federalreserve.gov/releases/h15/update/
B
www.bloomberg.com/markets/rates/
B
MONEY AND CREDIT
Bank Reserves, US
www.federalreserve.gov/releases/h3/
Commercial & Industrial
Loans, Commercial
Banks
Consumer Loans, all
commercial banks,
historical figures
Money Supply, US
US DOLLAR
Exchange Rates
http://research.stlouisfed.org/fred2/series/BUSLO
ANS/49
http://research.stlouisfed.org/fred2/series/CONSU
MER/49
www.federalreserve.gov/releases/h6/current
B
www.x-rates.com/
B
6
Exchange Rates
www.xe.com/ucc/
B
Exchange Rates
www.oanda.com/converter/classic
B
Exchange Rates,
Historical
Exchange Rates,
Historical
Exchange Rates, vs
Major Trading Partners
www.federalreserve.gov/releases/h10/hist/
www.oanda.com/converter/classic
www.federalreserve.gov/releases/h10/summary
B
ECONOMIC STATISTICS-ONE STOP SHOPPING
Common Economic
www.economicindicators.gov
Indicators
Joint Economic
www.gpoaccess.gov/indicators/
Committee, Congress
President’s Economic
http://w3.access.gpo.gov/eop/
Report
Raw data
www.economagic.com/
OTHER USEFUL SITES
Flow of Funds, Fed. Res.
Bd.
Glossary of Econ. & Fin.
Terms
Glossary of Econ. & Fin.
Terms
Glossary of Econ. & Fin.
Terms
www.federalreserve.gov/releases/zl/
www.exchange-handbook.co.uk/glossary.cfm?
www.digitaleconomist.com/glossary_macro.html
http://moneycentral.msn.com/investor/glossary/glo
ssary.asp?
7
TABLE SET 2: INDICATORS WITH HIGH MARKET SENSITIVITY
CLASS
INDICATOR
SOURCE
In declining order of sensitivity
NOTES
BOND MARKET – TEN SIGNIFICANT INDICATORS
Employment Employment situation B
Bonds sell off on strong jobs report especially when it is unexpected. This might result in a sell-off
Conditions
particularly if nearing the peak of the business cycle (high Capacity Utilization). Weak reports are
bullish for Bonds.
Inflation
Prices, Consumer
B
If greater than 50, bearish. If less than 45, bullish.
Pressures
(CPI)
Employment Manufacturing ISM
Positive for Bonds when claims jump above 30,000 per week
Conditions
Report
Inflation
Price Index, Producer B
A jump cuts Bond values and raises yields. A benign report is bullish.
Pressures
(PPI)
Employment Unemployment
B
Because this indicator leads the CPI thus giving advanced warning
Conditions
Insurance, Weekly
Claims
Consumer
Sales, Retail
B
Bonds decline on increasing sales.
Behavior
Home Sales
Housing Starts
B
A sharp and sustained rise in the confidence index is worrisome to Bonds. Lower levels of Consumer
& Const.
Confidence is positive for Bonds.
Activity
Economy
Purchasing Managers
Surprises are negative for Bonds.
Report, Chicago
Economy
Production, Industrial B
A sell-off can occur if production jumps by more than the expected amount. This is particularly the
and Capacity
case if CU is above 80%. Slower production with falling CU could raise Bond prices and lower
Utilization
interest rates.
Economy
GDP
B
A plus for bonds if growth is less than expected.
STOCK MARKET – TEN SIGNIFICANT INDICATORS
Employment Employment Situation B
.Increasing employment is bullish for stocks unless Capacity Utilization nears full capacity, 84%.
Conditions
Report
Little or no growth is bad for stocks.
Economy
Manufacturing Report
The stock market reacts favorably to a rising PMI. Investors worry when nearing 84% Capacity
ISM
Utilization.
Employment Unemployment
B
Stocks trend up if this indicator trends up. A persistent increase in jobless claims is negative for the
Conditions
Insurance Weekly
stock market..
Claims
Inflation
Prices, Consumer
B
Sharp increases are negative for the Stock Market.
8
Pressures
Inflation
Pressures
Consumer
Behavior
Consumer
Behavior
Economy
Economy
Economy
(CPI)
Price, Producer (PPI)
B
Sharp increases are negative for the stock market. This indicator tends to lead the CPI.
Sales, Retail
B
Stocks advance on upward trending Retail Sales.
Consumer Confidence
and Sentiment
Durable Goods
Advanced Report
Production, Industrial
and Capacity
Utilization
GDP
Declining Consumer Confidence is negative for the stock market
B
Growth is positive unless nearing CU of 84%.
B
Jumps in industrial production when nearing full Capacity Utilization are negative for Stocks.
Otherwise, Industrial Production is supportive of the Stock market.
B
If the annual rise is greater than 3.5% this is negative for the market while less than 3.5% is positive.
VALUE OF THE DOLLAR – TEN SIGNIFICANT INDICATORS
Employment Employment Situation
A vigorous jobs report can drive interest rates higher making the $ more attractive to investors. An
Conditions
Report
anemic jobs report is negative for the $.
International Trade, International
B
Any improvements in the trade balance is favorable for the $.
Economy
GDP
B
Rising GDP indicates a strong economy and this is favorable for the $ unless there is strong inflation
which makes the Market less appealing.
International Current Account
B
A deterioration in the Current Account Balance will erode the value of the $. A surplus is very bullish
Balance
Economy
Production, Industrial B
A jump in Production is positive for the $.
and Capacity
Utilization (CU)
Economy
Manufacturing ISM
The $ moves up if greater than 50.
Report
Consumer
Sales, Retail
B
The $ declines on jumps in Retail Sales.
Behavior
Inflation
Prices, Consumer
B
A sustained rise I negative for the $.
Pressures
(CPI)
Employment Unemployment
B
The $ declines on rising claims.
Conditions
Insurance, Weekly
Claims
Inflation
Productivity and
B
The $ strengthens if there are gains in productivity.
Pressures
Costs
9
TABLE SET 3: DATA ACQUISITION FORM (Note 3)
In declining order of sensitivity
Date _______________
INDICATOR
SOURCE
BOND MARKET – TEN SIGNIFICANT INDICATORS
Employment
http://stats.bls.gov/
Situation
Prices,
www.bls.gov/cpi/
Consumer, CPI
Manufacturing
www.ism.ws/ismreport/index.cfm
ISM Report
Price Index,
www.bls.gov/ppi/
Producer (PPI)
Unemployment
www.ows.doleta.gov/unemploy/claims_arch
Insurance,
Weekly Claims
Sales, Retail
www.census.gov/svsd/www/advtable.html
DATA LOCATION
Barron’s Market Lab/Economic Indicators/
Employment/Employed
Inflation/Consumer Price Index
Orders/
Inflation/Inflation
Employment/Initial Jobless Claims
Consumption and Distribution/Retail Store Sales
Housing Starts
www.census.gov/const/www/newresconstindex.html
Construction/New Housing Starts
Purchasing
Managers Report
Production,
Industrial and
Capacity
Utilization
GDP
www.napm-chicago.org
Orders/Purchasing Managers Index
www.federalreserve.gov/releases/g17/current
Economic Growth and Investment/Capacity Utilization and
Industrial Output
www.bea.gov/bea/rels.htm
Economic Growth and Investment/Gross Domestic Product
STOCK MASRKET – TEN SIGNIFICANT INDICATORS
Employment
http://stats.bls.gov
Situation Report
VALUE
Employment/Employed
10
Manufacturing
Report, ISM
www.ism.ws/ismreport/index.cfm
Orders/
Unemployment
Insurance Weekly
Claims
Price, Consumer
(CPI)
Price, Producer
(PPI)
www.ows.doleta.gov/unemploy/claims_arch
Employment/Initial Jobless Claims
www.bls.gov/cpi/
Inflation/Consumer Price Index
www.bls.gov/ppi/
InflationProducer Price Index
Sales, Retail
www.census.gov/svsd/www/advtable.html
Consumption and Distribution/Retail Store Sales
Consumer
Confidence and
Sentiment
www.conferenceboard.org/economics/consumerConfidence.cfm
Other Indicators/Consumer Confidence
Durable Goods
Advanced Report
www.census.gov/indicator/www/m3/adv/
Economic Growth and Investment/Durable Manufacturing
Production,
Industrial and
Capacity
Utilization
GDP
www.federalreserve.gov/releases/g17/current
Economic Growth and Investment/Capacity Utilization and
Industrial Output
www.bea.gov/bea/rels.htm
Economic Growth and Investment/Gross Domestic Product
.
$ - TEN SIGNIFICANT INDICATORS
Employment
http://stats.bls.gov/
Situation Report
Trade,
www.bea.gov/bea/newsreel/tradnewsrelease.h
International
GDP
www.bea.gov/bea/rels.htm
Current Account
Balance
Production,
Employment/Employed
Trade/Exports and Imports
Economic Growth and Investment/Gross Domestic Product
www.bea.gov/bea/rels.htm
Trade/Balance of Payments
www.federalreserve.gov/releases/g17/current
Economic Growth and Investment/Capacity Utilization and
11
Production,
Industrial and
Capacity
Utilization
Manufacturing
ISM Report
Sales, Retail
www.federalreserve.gov/releases/g17/current
Industrial Output
www.ism.ws/ismreport/index.cfm
Orders/
www.census.gov/svsd/www/advtable.html
Consumption and Distribution/Retail Store Sales
Price, Consumer
CPI
www.bls.gov/cpi/
Inflation/Consumer Price Index
Unemployment
Insurance, Weekly
Claims
Productivity and
Costs
www.ows.doleta.gov/unemploy/claims_arch
Employment/Initial Jobless Claims
www.bls.gov/lpc/
Employment/Employment Cost Index
NOTES
1. Indicators with high market sensitivity are in bold type.
2. Underlined internet addresses can be accessed by clicking on the address.
3. The data can be obtained from the Internet or from Barron’s Market Week.
SYMBOLS
B Barron’s Weekly/Market Week/Market Laboratory/Economic Indicators
12