The economic calendar includes the publication of numerous macroeconomic data. Longer-term investors examine various indicators and their changes over time to ascertain the overall direction of economic development.

Shorter-term market participants, such as traders, focus on current data. Often, their goal is to open a trading position when an indicator surprises forecasts – for example, 200K new jobs opened versus 100K expected. With such discrepancies between predicted and actual value, new information is actually coming into the financial markets, leading to high volatility.

By their nature, indicators are divided into three main groups – leading, coincident and lagging. Many find it practical to consider indicators from the different categories collectively – for example, a common index of leading indicators.

Here is a list of 15 indicators from the economic calendar that are of particular importance to financial markets. The indicators listed apply to the United States, but their close counterparts are published in the rest of the world.

  1. Non-farm payrolls this indicator is published every first Friday of the month and reflects the data on new non-farm jobs created in the previous month. This coincident indicator provides important information on the state of the labour market. The data do not include those employed in agriculture (farming), as well as some other categories of workers (certain groups of government employees, household employees, the self-employed, workers in non-governmental organizations).
  2. Initial Jobless Claims – it is published weekly and provides an early signal of the labour market situation. A rise in the number of claims is a negative signal about the economic outlook.
  3. Unemployment Rate – it measures the ratio of the unemployed to the labour force. It is published monthly.
  4. Real GDP – it is published quarterly by the U.S. Department of Commerce’s Bureau of Economic Analysis. It reflects the market value of final goods and services produced during the reporting period. It is called Real GDP because it takes into account the effect of price changes (inflation).
  5. ISM Manufacturing Index – this index is calculated on a sample basis (survey) among 300 manufacturing establishments. An index value above 50 signals an improvement in the manufacturing sector over the previous month. A value below 50 is a sign of a slowdown.
  6. ISM Non-Manufacturing Index – it is calculated on a sample basis (survey) among 400 service sector enterprises. An index value above 50 signals an improvement in the non-manufacturing sector compared to the previous month. A value below 50 is a sign of a slowdown.
  7. Building permits – building permits issued are a leading indicator of the state of the construction sector.
  8. New Home Sales – this lagging indicator reflects the demand for newly built homes. It is an important indicator of the state of the real estate market. It indirectly reflects household welfare and access to mortgage products.
  9. Existing Homes Sales – it reflects sales of existing homes that have already been purchased at least once and are reported in the new home sales statistics.
  10. Retail Sales – retail sales are an important indicator of consumption. Consumption has the highest weight among the individual components of GDP. Therefore, retail sales are an early signal of changes in GDP.
  11. S&P 500 – an index reflecting the performance of 500 of the largest publicly traded companies in the United States. It responds quickly to changes in the economic outlook, making it an important leading indicator.
  12. Interest Rate Spread – the difference between the yield on 10-year government bonds and 2-year bonds is constantly changing. Long-term yields rising faster than short-term yields suggests positive expectations for the future. The spread rises and the yield curve becomes steeper. With the opposite trend – a decline in long-term yields relative to short-term yields– the future looks more uncertain. The spread narrows and the yield curve becomes flatter. When long-term yields are lower than short-term yields (inverted yield curve), a recession can be expected. Changes in spreads are usually in the sights of longer-term investors.
  13. M2it reflects the money supply in circulation. This indicator is a direct result of the Fed’s policies – increasing the money supply aims to stimulate economic activity, while reducing the money supply aims to cool the economy.
  14. CPIthe Consumer Price Index measures the change in the price of a basket of goods and services over the past month (or year). It is a key indicator of final consumer inflation. Investors track the Core CPI in parallel, which excludes the more volatile components of food and fuel.
  15. PPIthe Producer Price Index measures the change in wholesale prices. It takes into account the prices at all three stages of the production process – finished goods, intermediate goods and crude goods.

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