|Key Economic Indicators and Statistics|
|http://www.sina.com.cn 2004/07/19 16:24 新浪教育|
Key Economic Indicators and Statistics
Key economic indicators and statistics are often quoted in the news as reasons for rallies and downward corrective moves in the financial markets. These economic data come from a variety of sources and measure different aspects of the state of the economy. Most of them are lagging indicators, while others are leading indicators. Financial market practitioners must have a good understanding of their definitions, reporting timing, usage, and which are the important ones being focused on by the prevailing markets. It is also very essential to understand market expectations vis-a-vis the reported figures.
We will now look at the key economic indicators and statistics of the U.S., the world’s largest economy. The health of this economy has significant implications and impact on the global economy. Thus the key objective of many economists, strategists, investment advisors and analysts in global financial institutions is to determine the state of health of this economy. Even if one does not cover the U.S. markets (e.g. Asian Equity Sales professional), there is a need to understand what these figures mean as the fundamentals of Asian equities are correlated to the U.S. economy. For example, U.S. interest rates (influenced by U.S. inflation) sets the tone for global interest rate environment, and remains a critical component for determining equity prices; U.S. consumer spending figures also has implications for the Asian companies exporting to the U.S., since a significant proportion of exports eventually goes there. In addition to these indicators in the U.S., finance professionals covering the non-U.S. markets have to be aware that these economic indicators and statistics are similarly available (to different extent, comprehensiveness, quality, and timeliness) in various countries.
Back to the U.S., there is a host of economic data being released by authorities on a weekly, monthly and quarterly basis. Here are some factors that determine the importance and relevance of the data:
The data’s relevance to the overall economy. Data that give good insights to large segments of the economy will be keenly awaited. Retail sales numbers fall into this category as consumer spending accounts for approximately two-thirds of all U.S. economic activities.
Timeliness of the information. Data for the most recent time period will be most keenly awaited, relevant, and have the strongest impact on the market.
Reliability and accuracy. Economic data are subject to revisions after the release date due to the comprehensiveness of data. Thus, data that are frequently and significantly revised subsequent to its release will be used with greater caution and paid less attention by market participants.
Below are some of the key US economic data releases.
Gross National Product (GNP)
Available quarterly, this is the sum of all goods produced by a nation, which includes consumption, investment, government purchases and net exports. In the U.S., of the four components above, consumption is the most significant, making up more than 50% of GNP. Analysts will look at the growth of GNP, its trends, quarter-on-quarter, year-on-year, by analyzing the various components in detail. GNP growth figures are also good indicators of potential inflationary pressures.
The Purchasing Managers?Index(PMI)
Published by the National Association of Purchasing Management(NAPM) monthly, this index correlates well with GNP growth. It provides the first comprehensive look at the manufacturing sector via its diffusion index, derived directly from purchasing executives in over 250 industrial companies. Twenty-one industries in 50 states are represented on the Business Survey Committee. An index reading above 50 implies expansion in the manufacturing sector. Although the PMI is basically concerned with the manufacturing sector, historically, this sector leads the overall economy.
Other than the GNP, employment is the most important monthly statistics released and the payroll employment figure which provides the first complete look at the economy for any given month. This report provides a wealth of information about virtually every sector of the economy. Key statistics in the employment report are important guides to understanding, monitoring, and forecasting economic conditions monthly and over longer periods:
1. Civilian unemployment rate - the percentage of the civilian labor force(defined to include those who are either working or actively seeking work) that is unemployed. The unemployment rate is a lagging economic indicator, since most businesses will alter workers?hours or pay before they begin to add or drop employees. It is used as a gauge of how tight the labor market is.
2. Change in total non-farm payroll employment - the number of payroll jobs added or lost between monthly surveys in the nonagricultural economy. Used by many in the financial markets as a shorthand approximation of the employment report’s overall tone, the change in total payroll jobs directly influences the calculation of personal income earned during the month.
3. Change in manufacturing payroll employment - the number of payroll jobs added or lost in factory business. This figure can be broken down further, to reflect employment changes among production workers and in a variety of industries and be used to infer the path of industrial production.
4. Average non-farm workweek - the average number of hours worked per week in nonagricultural business. This indicator directly affects the aggregate number of hours worked per week, which in turn can be used to gauge changes in the Gross Domestic Product (GDP).
5. Average workweek in manufacturing - the average number of hours worked per week by people on factory payrolls. Changes in the factory workweek often lead to changes in manufacturing employment, as employers typically will adjust employees?hours before adding or cutting jobs. Shifts in the factory workweek include changes in overtime hours, which are also reported separately. The factory workweek is one of the ten components in the index of leading economic indicators
This comprehensive employment statistics are vital information. With it, we would know how many people were employed in the manufacturing sector in a given month, how long they worked, and how much overtime they accrued. Using these figures, economists would be in a better position to project how much the economy produced during the month.
Producer Price Index (PPI)
For investors, keeping tabs on inflation is of the utmost importance. The pace of inflation influences the Federal Reserves?policies and actions, which in turn would have a major impact on the financial markets. The PPI would be the first indicator of inflation each month as it measures prices at the producer level including food 26%,energy resources 9%,consuming products 40%, productive assets 25% and capital equipment 25% is the first inflation report to hit the market each month. Of the components that make up PPI, the food and energy groups are the most volatile, and economists tend to isolate these groups to have a better idea of inflation’s true path.
Consumer Price Index (CPI)
In contrast to the PPI above, the monthly CPI measures the prices of both commodities and services, and is widely regarded as the most important measure of inflation that can significantly affect interest rates. To determine the items that go into the CPI, the Bureau of Labor Statistics conducts a survey of consumer expenditures about every 10 years. The three biggest constituents of the CPI are housing (42%), food (18%) and transportation (17%), and economists would typically concentrate on the CPI excluding the volatile food and energy components to get at the core rate of inflation.
Retail Sales Report
This is the first solid indication of strength or weakness in consumer spending on a monthly basis personal consumption in the U.S. represents over 50% of GNP. But it is important to note that this report contains data on purchases of goods only and not services. Another drawback of this report is that data is reported in nominal terms, and not adjusted for inflation. Probably the most important drawback is that retail sales figures are extremely volatile. Due to the lack of information to base a projection, the figure is frequently subject to massive revisions. Thus, users need to adopt this with caution.
Housing Starts/Building Permits
In the US, the housing sector accounts for about 27% of investment spending and 5% of the overall economy. One of the key influences on the residential housing market is the mortgage rate, which results from the overall interest rate environment. A sustained decline in housing starts to cause the economy to slow down and possibly head into recession. Expressed at an annual rate, this monthly series reports the total number of new private housing units on which the construction has begun and building permits have been issued at by 19,000 locations.
Durable Goods Orders
Durable goods orders provide market participants with insights on the manufacturing sector. This report measures the volume of orders placed with U.S. manufacturers for goods with a life expectancy of at least three years. These goods include primary metals, electrical and non-electrical machinery, consumer hard goods, transportation equipment (including aircrafts and automobiles), and military hardware .
The figures for durable goods orders are very volatile. Analysts normally focus on the non-defense(civilian) component of orders, because bookings for military hardware are especially volatile from month to month and constitute a small part of the economy.
The Index of Leading Economic Indicators (LEI)
Designed to predict future aggregate economic activity, this index is a composite of several different indicators. Historically, the LEI reaches peaks and troughs earlier than the underlying turns in the economy and therefore is an important tool for forecasting and planning by analysts. As a rule of thumb, turning points in the economy are signaled by three consecutive monthly LEI changes in the same direction.
The LEI’s individual components are chosen because of their economic significance, statistical adequacy, consistency of timing at cycle peaks and troughs, conformity to expansions and contractions, and prompt availability.
The ten equally-weighted leading indicators are as follows:
The financial and expectations indicators give indirect signals about upcoming changes in business activity, whereas the non-financial group provides more direct evidence about economic trends. The LEI index report seldom shocks the markets since most of the 10 components are known through prior releases. As a result, forecasts of the LEI’s performance are generally accurate.
Merchandise Trade Balance
Importance of the trade component of U.S. GNP is growing, thus the Merchandise Trade Balance is of increasing importance. This is derived from the difference between the exports and the imports of the U.S. And this number and its trend will have implications for the demand for US dollars and the health of its manufacturing base. Strong trade balance will indicate the need to buy US$ (thus strengthening the US$) and the healthy state of the export industries. The US has been running a trade deficit since the 1970s, and market focuses on the trend of this figure.
主要经济指标和统计数字在新闻中频频出现，是分析人员解释金融市场上下波动震荡的重要指标。这些经济数据的来源不同，测量着经济领域的不同方面。在这些经济指标中，大部分属于滞后指标(lagging indicator)，而另一些属于领先指标(leading indicator)。金融从业者应掌握各项金融指标的定义、公布时间、用途，以及哪些指标是当前市场所关注的。更重要的是，要清楚市场期望和指标数据之间的对比性。
采购经理指数每月由全国采购经理协会(NAPM, National Association of Purchasing Management)公布，这个指数与GNP的增长具有很大相关性。这个指数直接从250多家采购经理处获得，通过它的动向指数(diffusion index)特性，提供了制造部门第一手的详尽资料。制造业调查委员会(Business Survey Committee)选定了50个州的21个行业作为代表。当总体指数高于50%的时候，意味着制造领域的生产扩张。尽管采购经理指数基本上反映的是制造业企业的发展状况，然而从历史的角度来看，制造业部门总体上仍然领导着整个美国经济。
同生产者物价指数相比，消费者物价指数不但衡量每月商品价格的变化，而且衡量服务产品价格的变化。这个指标被普遍认为是衡量通货膨胀最重要的指标，并对利息率的变化有极为重要的影响作用。为了确定消费者物价指数的构成项目，美国劳务统计局(Bureau of Labor Statistics)每10年就要作一次消费支出调查。构成这个指数最重要的三项是：住房(42%)、食品(18%)和交通(17%)。经济学家在统计时会排除容易波动的食品和能源项目，从中得到可以测量通货膨胀的核心数据。
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