Macro statistics calendar. What metrics to look for firstFinanciers should pay their attention not only to the fundamental characteristics of companies, and on the situation in the economy.
The state of affairs in the economy affects both the income of companies, and on the dynamics of money markets.
To evaluate the economy, there are calendars of statistics.
The dynamics of macroscopic indicators will make it possible to assess the big picture - for an average- and long-term investments.
Short-term participants in exchange trading will be helped by assessing deviations of characteristics from agreement (Average)-expert forecast. In case of "surprises" (abrupt deviations from consent) local sharp movements in money markets are likely. This is especially tracked in the event of a sharp slowdown in the economy or its recovery from the crisis..
To assess the broader market in particular, it is essential to track the US macroeconomic indicators., PRC, European Union and Federal Republic of Germany.
GDP
Gross Domestic Product is the overall indicator of production in a state. GDP is an indicator, which can tell the most about the health of the economy. The indicator indicates the market price of all products and services, which were produced in the economy during the reporting period. It includes personal consumption, cabinet purchases, personal supplies and other characteristics. Published only by district and presented in annual values as a percentage. GDP is only a complete and detailed report.
Despite that, that quarterly performance can be volatile, a long-term trend of an increase in gross domestic product is more decisive information on the state of affairs in the economy. General agreement is: increase in US gross domestic product should be 2.5 to three and a half percent per year. This is enough for that purpose, so that companies make a profit, and jobs increased.
Read more: "US GDP as an indicator of the health of the United States economy. How data can influence the market "
SMEs
PMI is the metrics of purchasing managers (Purchasing Managers’ Indices). They are formed as a result of the questionnaire..
There are a number of types of PMI. The first indicators to emerge from ISM, US Institute for Supply Management. There are two types of ISM indices - industry and service industry.
IHS Markit metrics came later. The methodology for their calculation and interpretation is identical with the indicators from ISM. Indicators from Markit are calculated more than in 40 States, which account for approximately 85% global gross domestic product. Indicators are published twice a month. A preparatory version is released in the middle of the reporting period, at the end of the month (first subsequent) the final version is published. Highlight Manufacturing PMI, service sector and aggregates. In the US, indicators from ISM are more important, probably, due to a longer long history.
Macro statistics calendar. What metrics to look for first
Index values are generally interpreted in the following way:
• Above 50 - creation and economy are booming.
• Below 50, but higher 45 - creation decreases, but the economy in general does not stop growing.
• Above 60 during 3-6 months in an intensively developing economy and low unemployment can push the central bank (FED in USA, for the ECB, EU aggregates are of great importance) to increase interest rates.
• Below 45 over a long period of time – most likely, creation and economy are in decline. The possibility of, that the central bank will resort to lowering interest rates or other measures, to provoke economic development.
• Below 42 over a long period of time could be a sign of an impending recession
Labor market
The labor market is one of the 2 main characteristics, which the Fed is guided by in the decision-making process.
Official BLS Employment and Unemployment Report is published in the US first of every month. This is the main macro release of the month..
A data block consists of several elements. Main:
• Number of workplaces, which were created in the non-agricultural sector (non-farm payrolls) - a more fundamental indicator. Includes wholly and partly employed and personal, and municipal sectors. Formed on the basis of a survey of companies.
• Number of workplaces, which were created in the personal sector.
• Percentage of unemployed population - the number of unemployed as a percentage of the total labor force. Formed on the basis of a survey of private households. The lower the indicator, the better the state of the economy. But in the post-recession period in the United States, the state of affairs was observed for a long time., when desperate residents stop finding jobs, therefore they are no longer listed as unemployed and leave the labor force.
• Underemployment rate - the percentage of unemployed, uniting not only those who actually do not work, but also persons, dissatisfied with their place of work, but unable to find another because of the state of the economy.
• Average hourly wage rate. Interesting is its percentage change. The higher it is, the more significant consumer demand, as well as inflation.
Inflation
It's about price dynamics, which can be measured relative to the previous month (m / m) or relative to the same period last year (y / y).
Inflation is commonly understood as a steady rise in prices.. It makes more sense to look at year-to-year changes. Inflation in the normal sense implies a moderate increase in prices: 2-4% for the USA and even 4-6% per annum (in the case of Russia), but not 50% or something like that.
Consumer Price Index (Consumer Price Index, CPI) - the most famous and intuitive indicator, reflects the change in the average price level of a fixed consumer basket of goods and services (more 80 thousand. objects). Basic version of the index (Core CPI) cleared of such volatile components, as the cost of food and energy and allows you to smooth out various fluctuations, including seasonal.
Consumer spending price index (PCE Price Index), or rather, its percentage change is an inflation indicator, which takes the FRS into account when making decisions on monetary policy. The long-term target of the Federal Reserve is at the level of 2% on an annualized basis, and strong deviations are cause for some concern. Average inflation PCE (on an annualized basis), usually, on 0,3% below the dynamics of the Consumer Price Index (CPI), what is related to the calculation methodology (CPI does not take into account the effect of substitution of some products for others).
Producer Price Index (Producer Price Index, PPI) - measures the dynamics of goods at the producer level, not retail outlets. At this stage of the chain, inflationary shifts are diagnosed faster.. Ideally, inflationary trends at the PPI level with a time lag of 2-4 months are reflected in the CPI dynamics. We have a leading indicator, albeit somewhat secondary in nature.
The dynamics of wages demonstrates well the change in consumer demand. The flip side of wage growth is a decrease in the margins of manufacturers of goods and services (reduced profitability of sales).
