Name: _________________________________ Period ________ Date ____/____/____
Economic Indicators
Minds on the Markets
Module 07 – Lesson 1
1. Economic Indicators
1.1. What indicators help investors assess the state of the economy?
1.1.1. The area of the economy a college student with a year or two until graduation will
be most interested in:
_____________________________________________________________________
_____________________________________________________________________
___________________________________________________________________
.
1.2. Economic indicators are measurements of different aspects of the US economy that
signify ___________________________________________________________________ .
1.2.1. Economic indicators can _______________________________________________
in financial markets. However, studying economic indicators can be challenging
because there is a ______________________________________________________
_____________________________________________________________________ .
1.3. While each indicator alone cannot provide a full ______________________________
. These indicators can be evaluated together to make
_________________________________________________________________________ .
2. Economic Indicator Calendar
2.1. The
provides a monthly Economic
Calendar identifying when each of the reports are released. This calendar, _______
, allows the viewer to click
on different reports and see how the _________________________________________
_________________________________________________________________________ .
2.2. Key economic indicators (also called
highlighted.
2.3. The calendar URL: Bloomberg.com/markets/economic-calendar/
3. Global Economic Indicators
) are
Name: _________________________________ Period ________ Date ____/____/____
3.1. In a global market, it is important to study not only US economic indicators, but also
, especially
such as the United Kingdom,
Japan and major Euro-zone countries (i.e. Germany and France). This ___________
the number of economic indicators that must be followed.
4. Key Economic Indicators
4.1. Some economic indicators are much more influential than others. The relative
importance of these economic indicators _____________________________________ .
4.2. In particular, the markets will place more emphasis on economic indicators they believe
that the __________________________________________________________________
_________________________________________________________________________ .
4.3. The economic indicators and the
differ within a period
covered. _________________________________________________________________
_________________________________________________________________________ .
4.4. What drives financial market movements is not the “actual data” that is released but,
rather, how this “actual data” compares with “
–
”
. Remember,
financial markets are “
,” meaning all available market
information, including the consensus forecast, is ______________________________ .
5. Economic Indicators
5.1. Employment
5.1.1. Employment Situation: Released monthly the first Friday of the following month
and breaks down the employment situation ______________________________
.
The Employment Situation covers more than
and
a few hundred metropolitan areas. The most watched data of the report is the
___________
payroll which shows
_____________________________________________________________________
_________________________________________ outside of the agriculture sector.
Name: _________________________________ Period ________ Date ____/____/____
5.1.2. New Jobless Claims: The jobless claims report is released every Thursday and it
shows _______________________________________________________________
_____________________________________________________________________ .

If the number of first-time files
, it indicates a
; but if the number of first-time files
increases, it indicates a negative. Because jobless claims are released weekly,
___________________________________.
5.2. Inflation
5.2.1. Consumer Price Index (CPI): The CPI is __________________________________
_
and is released monthly. It shows the price
change for a fixed basket of goods bought by an average working class family.
This index is important because _________________________________________
_____________________________________________________________________
_____________________________________________________________________ .
5.2.2. Producer Price Index (PPI): The PPI is a measure of inflation at the __________
. The index calculates the ____________________________
that go into the basket of finished goods.
5.2.3. Core CPI and PPI: The Core CPI and Core PPI removes ____________________
from the price change calculation. Food and energy are considered the ______
.
They are removed from the core calculation in order to obtain a more accurate
picture of
____________________
occurring in the economy.
5.3. Gross Domestic Product (GDP)
5.3.1. The GDP is __________________________________________________________
.
The US GDP is released quarterly. GDP is the most comprehensive economic
indicator. A higher GDP points to a
GDP also can be divided by the population (GDP per capita) to show a country’s
standard of living.
5.3.2. GDP = _______________________________________________________________
.
Name: _________________________________ Period ________ Date ____/____/____

C = _____________________________________________________________

I = ______________________________________________________________

G = _____________________________________________________________

NX = ____________________________________________________________
5.3.3. Gross Domestic Product is revised in each of the __________________________
. For example, GDP for the first
quarter is released in April and revised in May and June. These releases can __
.
5.4. Consumer Confidence
5.4.1. Every month, American consumers and households are surveyed regarding their
_____________________________________________________________________ .
5.4.2. Consumer confidence in the economy can have a great effect on ____________
___
. For example, in a recessionary economy, where
unemployment is high, consumers will be reluctant to purchase goods and
services, _____________________________________________________________ .
5.4.3. US Consumer Confidence Index: A monthly survey of 5,000 households taken by
The Conference Board that provides a ___________________________________
_____________________________________________________________________ .
5.4.4. Michigan Consumer Sentiment Index: A monthly survey conducted by the
University of Michigan that conducts telephone surveys in order to __________
_____________________________________________________________________ .
5.4.5. Retail Sales: A measure of ______________________________________________
consumers are buying from data collected by the US Census Bureau. This data is
released in the middle of each month for the previous month. This indicator is
important because _____________________________________________________
_____________________________________________________________________
. Strong retail sales data can indicate a high
degree of
5.5. Housing
.
Name: _________________________________ Period ________ Date ____/____/____
5.5.1. Housing Market Index: A monthly report; surveying members of the National
Association of Home Builders; that gauges their perceptions of the overall economy
and the housing market. This indicator is similar to the Consumer Confidence
indictor because it identifies ____________________________________________ .

A willingness to buy a home shows
but
an aversion to buy a home indicates _________________________________
_________________________________________________________________ .

Other housing indicators are Housing Starts, Building Permits, New Home
Sales, and Existing Home Sales.
6. Web Challenge #1: Critics say that the official unemployment rate does not accurately reflect
the state of the workforce and whether people who want jobs are getting them. Research
three criticisms of the official unemployment rate. Then, identify your position as to
whether each is valid. (Hint: Research those who are excluded from the official statistics)
7. Web Challenge #2: For the most recently completed calendar quarter for which there was a
report:
7.1. The consensus economists’ GDP estimate for the quarter that existed when the initial
results were announced, as well as how long after the quarter the initial announcement
was made (ie: the lag time).
7.2. If either has occurred, the first and second revision to the GDP, when they occurred and
how different they were from the earlier report.
8. Web Challenge #3: Because Social Security payments to retirees are “indexed” (ie: adjusted)
by the amount of the Consumer Price Index (CPI), that measure has become a “political
football.” There has been some discussion of using Chained CPI instead. What is Chained
CPI? How does it differ from CPI? Why do advocates say it is a better method for
measuring changes in the cost of living? What is the biggest criticism of Chained CPI?