PCE Deflator, (Personal Consumption Expenditure ... - Morningbull

PCE Deflator, (Personal Consumption Expenditure 

Deflator) - United States 

A measure of inflation based on changes in personal consumption. Unlike the CPI, 

which is based on a fixed basket of goods, the Personal Consumption Expenditures 

(PCE) Deflator finds the average increase in prices for all domestic personal 

consumption. PCE Deflator has been shown to be a more comprehensive and 

consistent gauge of inflation in the US. 

Recent Analysis and Insight into PCE Deflator, from DailyFX 

Price changes may cause consumers to switch from buying one good to another. Whereas the 

fixed-basket CPI does not account for altered spending habits caused by price changes, the PCE 

Deflator's ability to account for such substitutions makes it the preferred measure of inflation for 

the Federal Reserve. Thus, changes in the PCE offer insight on the direction of future monetary 

policy. 

On a Technical Note: In reality, the CPI and PCE Deflator report very close figures. On average 

the two differ by about 0.3% annually, with the CPI tending to overstate inflation and the PCE 

understating it. 

Relevance: Tends to move markets on release 

Release schedule : 12:30 (GMT); monthly, four to five weeks after the reporting month 

Revisions schedule : Moderate revisions in the months following the report as more complete 

data is available, plus annual revision in July or August. 

Source of report : Bureau of Economic Analysis, Department of Commerce (U.S.) 

Web Address : http://www.bea.gov/ 

Address of release : http://www.bea.gov/bea/newsrel/pinewsrelease.htm 

AKA : PCE Price Index, Chain Deflator, Implicit Price Deflator for Personal Consumption 

Expenditures , IPD for PCE, Chain-Type Price Index for Personal Consumption Expenditures , 

CTPIPCE 

Consumer Price Index - United States 

CPI assesses changes in the cost of living by measuring changes consumer pay for 

a set of items. CPI serves as the headline figure for inflation. Simply put, inflation 

reflects a decline in the purchasing power of the dollar, where each dollar buys fewer 

goods and services. In terms of measuring inflation, CPI is the most obvious way to 

quantify changes in purchasing power. The report tracks changes in the price of a 

basket of goods and services that a typical American household might purchase. An 

increase in the Consumer Price Index indicates that it takes more dollars to purchase 

the same set basket of basic consumer items.

Inflation is generally bad news for the economy, causing instability, uncertainty and hardship. To 

address inflation, the Fed may raise interest rates. However, the Fed relies on the PCE Deflator 

as its primary gauge of inflation because the CPI does not account for the ability of consumer to 

substitute out of CPI's set. Price changes tend to cause consumers to switch from buying one 

good to a less expensive-other, a tendency that the fixed-basket CPI figure does not yet account 

for. Given that the PCE Deflator is a more comprehensive calculation, based on changes in 

consumption; it is the figure the Fed prefers. 

The figure is released monthly, as either a month over month annualized percentage change, or 

percentage change for the full year. The figure is seasonally adjusted to account seasonal 

consumption patterns. 

On A Technical Note: The CPI includes over 200 categories of goods and services included, 

divided into 8 main groups, each with a different weight: Housing, Transportation, Food, Medical 

Care, Education and Communication, Recreation, Apparel, and Other Goods and Services. 

CPI Excluding Food and Energy - United States 

The CPI is also reported excluding food and energy; two of its most volatile components. These 

components are particularly sensitive to temporary economic factors like oil prices, natural 

disasters and seasonal affects. Consequently, CPI excluding Food and Energy provides a more 

stable figure, but at the cost of overlooking two significant sectors in the economy (together food 

and energy comprise nearly a quarter of the goods included in the CPI). 

The figure is the monthly percent change in the index. 


Release schedule : 8:30 AM (EST); monthly 

Revisions schedule : Annual revisions made in February 

Source of report : Bureau of Labor Statistics, Department of Labor (U.S.) 

Web Address : http://www.bls.gov 

Address of release : http://www.bls.gov/cpi/ 

Producer Price Index (PPI) - United States 

Measures changes in the selling prices producers charge for goods and services, and well as 

tracks how prices feed through the production process. Because producers tend to pass on 

higher costs to consumers as higher retail prices, the PPI is valuable as an early indicator of

inflation. Simply put, inflation reflects a decline in the purchasing power of the Dollar, where each 

dollar buys fewer goods and services. The report also gives insight into how higher prices from 

raw materials flow toward the final product. 

A rise in PPI signals an increase in inflationary pressures. Given the economic instability 

associated with rising price levels, the Fed often will raise interest rates to check inflation. A low 

or falling PPI is indicative of declining prices, and may suggest an economic slowdown. 

The headline figure is expressed in percentage change of producer price. 

Notes: The PPI records prices at various stages of production: raw goods, intermediate goods 

and finished goods. Though intermediate and crude goods price do provide insight for future 

inflationary pressure, it is the price of finished goods that generates most interest for market 

participants. The finished goods data is able to gauge price pressure before the goods reach the 

retail market. 

Core PPI, Excluding Food and Energy 

The PPI is also reported without the volatile food and energy components. In addition to being 

seasonally volatile, the two comprise a significant portion of US goods. As a result, any sudden 

disruption in oil or food supplies will significantly distort the Producer Price Index inflation 

assessment. By excluding such entities, Core PPI is able to provide a truer, more consistent 

picture of US inflation trends. 

Relevance: Moderate market impact 

Release schedule : 12:30 (GMT); monthly, 2 weeks after the reporting month 

Revision schedule: one monthly revision after four months, annual revisions every February 

Source of report : Bureau of Labor statistics, Department of Labor 

Web Address : www.bls.gov 

Address of release : http://www.bls.gov/ppi/ 

Employment - (Non Farm Payrolls and 

Unemployment Rate) United States 

One of the most widely anticipated reports on the US economic calendar, the 

Employment Situation is a timely report that gives a picture of job creation, loss, 

wages and working hours in the United States. Data in the report relies on the 

Household Survey and the Establishment (or Payroll) Survey. While the Household 

Survey is based on the interviews to US households, the Establishment Survey

queries business establishments, making it the preferred source of data. The 

Employment Situation's has many significant figures such as: Change in Non Farm 

Payrolls, Unemployment, Manufacturing Payrolls, and Average Hourly Earnings. 

The headline figures for this report are reported monthly, as the total number of new jobs in 

thousands (say, 120K new jobs), and the unemployment rate. 

Change in Non-farm Payrolls 

Monthly change in employment excluding the farming sector. Non-farm payrolls is the most 

closely watched indicator in the Employment Situation, considered the most comprehensive 

measure of job creation in the US. Such a distinction makes the NFP figure highly significant, 

given the importance of labor to the US economy. Specifically, political pressures come into play, 

as the Fed is responsible for keeping employment in a healthy range and utilizes interest rate 

changes to do so. A surge in new Non-farm Payrolls suggests rising employment and potential 

inflation pressures, which the Fed often counters with rate increases. On the other hand, a 

consistent decline in Non-farm Employment suggests a slowing economy, which makes a decline 

in rates more likely. 

Unemployment Rate 

The percentage of people registered as unemployed in the United States. The figure is calculated 

by dividing the number of unemployed individuals in the labor force by the total labor force. 

Where the headline figure Change in Non-Farm Payrolls generally moves the market upon 

release, the Unemployment Rate serves as the most popular snap-shot figure for current labor 

conditions in the US. 

The unemployment figure can give insight into the economy's production, consumption, earnings, 

and consumer sentiment. A lower unemployment rate equates to increased expenditure, as more 

people have jobs and wages to spend. Increased expenditure encourages economic growth, 

which can spark inflation pressures. Conversely, high levels of unemployment signal economic 

instability and weakened demand. 

Persons are considered unemployed if they are able and willing to work but without a job and 

have actively sought employment within the last four weeks. The labor force includes all 

employed and unemployed individuals 16 years and older. 

Manufacturing Payrolls

Measures job creation or loss in manufacturing sector. Manufacturing Payroll is reported as the 

net change in jobs from the previous month's figure. The figure is significant as an indicator of the 

health of the manufacturing sector. A high Manufacturing Payrolls number can signal increased 

demand for manufactured goods and a subsequent increase in production. 

Average Hourly Earnings 

An indicator of how the average level of pay is changing. The Average Hourly Earnings figure 

provides insight into future spending and inflation. A High Average Hourly Earnings bodes well for 

future consumption, as workers have more disposable income. High figures may indicate 

inflationary pressures due to employee's additional potential to spend. The figure is either 

measured in hourly or weekly averages or as a percent change from the previous month. 


Release schedule: 8:30 (EST); monthly, usually first Friday of every month 

Revisions schedule: previous two months, can be major, benchmark changes every 10 years 

Source of report: Bureau of Labor Statistics, Department of Labor (U.S.) 

Web Address: http://www.bea.gov/ 

Address of release:http://www.bls.gov/news.release/empsit.toc.htm, View Release Schedule 

AKA: Change in Non farm payrolls, New Job Creation, Payroll Data, Employment Rate, 


Personal Consumption Expenditure (PCE) - United 

States 

Comprehensive measure of how much consumers spend each month, counting 

expenditures on durable goods, consumer products, and services. Personal 

Consumption is a comprehensive measure of GDP; consequently the figure is 

watched as an indicator for economic trends. Spending also has direct affect on 

inflationary pressures. 

A healthy Personal Spending figure means that consumers are buying goods and services, 

fueling the economy and spurring output growth. The report is particularly valued for forecasting 

inflationary pressures. Taken in excess these high levels of consumption and production may 

lead to an overall increase in prices. Indeed, the Fed uses a measure of inflation derived from the 

PCE as their primary gauge of inflation. 

On the other hand, persistently low Personal Spending may result in decreasing levels of output 

and an economic downturn.

Because income is either spent or saved, Personal Spending (when reported as a percent of 

income rather than the headline percent change) has an inverse relationship to personal saving. 

Economists watch the growth of Personal Spending in relation to income and saving to determine 

if consumers are living beyond their means, which would influence levels of borrowing and future 

consumption. 

The PCE figure is released in headlines as a percent change from the previous month. 

Core Personal Consumption Expenditure 

Volatile items like food and energy can fluctuate widely due to seasonal and non-systemic factors. 

In order to provide a less erratic picture of Personal Consumption, food and energy items are 

excluded in the PCE core report. 

The headline figure of PCE is expressed in percentage change in spending for the quarter. 

Note: The Personal Consumption Expenditure figure is reported with the Personal Income and 

Outlays figure. 


Release schedule : 12:30 (GMT); monthly, four to five weeks after the reporting month 





Address of release : http://www.bea.gov/bea/newsrel/pinewsrelease.htm 

AKA : PCE, Personal Spending, Personal Consumption 

GDP Price Index - United States 

Measures changes in the prices of goods and services that are included in US GDP. The GDP 

Price Index is an indicator for inflation calculated by comparing the current GDP to GDP in the 

reference year. A high or rising GDP Price Index, like other indicators of inflation, puts pressure 

on the Federal Reserve to raise interest rates. 

The GDP price index differs from other more popular inflation measures like CPI, in that it 

includes all products accounted for by GDP and does not include the affects of changes in import 

prices. Furthermore, the report is only released quarterly and commands little market attention 

because of it lack of timeliness.

The headline figure is the annualized percentage change. 

Relevance: Rarely affects markets 

Release schedule : 8:30 AM (EST); Quarterly 

Revisions schedule : Moderate monthly revisions, plus more substantial annual revisions at the 

end of July 



Address of release : http://www.bea.gov/bea/dn/home/gdp.htm 

AKA : Gross Domestic Product Index 

Personal Income - United States 

Broad gauge of employee earnings in the US . Personal Income measures the pre-tax income 

households receive from employment, investments, and transfer payments. As wages and 

salaries make up the majority of Personal Income, the figure can provide insight on the US 

employment situation. However, because Personal Income is released after the headline 

employment figure and earnings figures, its impact on the market is muted. The figure is still 

useful in gauging the purchasing ability of consumers, though, as rising Personal Income allows 

for strong consumers spending. Such spending drives output growth and fuels the US economy. 


Release schedule : 8:30 AM (EST); monthly, 





Address of release : http://www.bea.gov/bea/dn/home/personalincome.htm 

Import Price Index - United States 

Tracks changes in the prices paid for goods imported to the United States . The figure is 

significant in relation to the trade balance, the difference between the total value of exports and 

the total value of imports. A positive trade balance (surplus) acts as an appreciating weight on the 

dollar, reflecting demand for dollars in exchange for exports. Conversely, a negative value 

(deficit) puts downward pressure on the dollar's value. Given such impacts, traders assess 

changes in import prices to gain insight on the trade balance. The Import Price Index becomes

useful in determining whether a change in import volume has actually sprung from a higher 

foreign demand or from a real increase in prices for foreign goods. 

The US is a net importer nation, where imports a significant part of the nation's GDP. Accordingly, 

a major price swing in foreign goods can have significant impact on the US inflation. 

The headline figure is the percentage change in the index from either the previous month or for 

the year. Import Price Index Excluding Petroleum gives a better overall assessment to the import 

price change in the United States since petroleum price is highly volatile. 


Release schedule : 8:30 AM (EST); monthly, released monthly around the middle of the month 

Revisions schedule : Monthly revision to the previous three months 



Address of release : http://www.bls.gov/mxp/home.htm#publications 

AKA : Import/Export Price Index, Import Price Index Excluding Petroleum 

Export Price Index - United States 

Tracks price changes of U.S. export goods. The figure is used to determine whether a change in 

the headline Export figure is representative of an increase of goods sold to foreign nations or just 

an increase in the price of export goods. United States exports account for approximately a tenth 

of the nation's GDP. The headline figure is the percentage change in the index from either the 

previous month or year. 


Release schedule : 8:30 AM (EST); monthly, released monthly around the middle of the month 

Revisions schedule : Monthly revision to the previous three months 



Address of release : http://www.bls.gov/mxp/home.htm#publications 

AKA : Import/Export Price Index

Advance Retail Sales - United States 

Monthly measure of sales of goods to consumers at retail outlets. The figure is a significant 

market mover, valuable both for its timeliness and insight into consumer demand and consumer 

confidence. Consumer spending is vital to the US economy, accounting for more than two-thirds 

of all economic activity. Given that retail sales make up a hefty one third of such spending, the 

Advanced Retail Sales figure acts as a measure of consumer demand before GDP is released. 

The figure has its limits, though. For instance, the timely release of the report comes at the cost of 

volatility in the figures and significant monthly revisions. It is not unusual for the figure to come out 

positive one month, only to be subsequently revised as negative. Retail Sales can also be volatile 

due to seasonality. Additionally, the report has been criticized for excluding service sector sales 

and failing to adjust for inflation. Despite these drawbacks, the figure still moves the market on 

release, mainly because of the importance of consumer spending to the US economy. 

The Retail Sales figure is calculated as the total receipts of retail sales in nominal dollars based 

on a sample of stores throughout the month - returns, taxes and finance charges are excluded. It 

appears in the headlines as the annualize percentage change from the previous month. 

Advance Retail Sales Less Autos 

The Retail Sales figure is also reported excluding automobile sales. Given their high cost, auto 

sales contribute significantly to retails sales, comprising nearly a quarter of the figure. As a result, 

changes in automobile sales can produce high fluctuations in the retails sales report. Vehicle 

sales are prone to seasonal changes, thereby easily distorting retail sales trends. To provide a 

more accurate picture of retail sales the auto component is removed and followed more closely. 


Release schedule : 8:30 AM (EST); monthly, midmonth and approximately two weeks following 

the reporting month's end 

Revisions schedule : Significant month to month revisions to adjust for data that was 

unavailable at the time of the original release. No adjustments are made for inflation. 

Source of report : Census Bureau, Department of Commerce 

Web Address : http://www.census.gov/ 

Address of release : http://www.census.gov/svsd/www/advtable.html 

AKA : Monthly Advanced Retail Trade Survey, MARTS, Retail Sales Less Autos

FOMC Rate Decision - United States 

The announcement of whether the Federal Reserve has increased, decreased or 

maintained the key interest rate. The FOMC meets eight times per year to decide on 

monetary policy. After each meeting policy decisions are announced. The main task 

of the FOMC is to set the monetary stance by fixing the overnight borrowing rate, 

which essentially sets short-term lending rates in the US. Through this mechanism, 

the FOMC attempts to affect price levels in order to keep inflation within the target 

range while maintaining stable economic growth and employment. 

The Federal Reserve's Cash Rate Target decision significantly influences financial markets. 

Changes in rates affect interest rates for consumer loans, mortgages, bonds, and the exchange 

rate of the U.S. Dollar. Increases in rates or even expectations of increases tend to cause the 

Dollar to appreciate, while rate decreases cause the currency to depreciate. Unlike most central 

banks, the Federal Reserve does not announce an official target inflation rate, arguing 

independence and flexibility is necessary to implement monetary policy effectively. 

The Federal Reserve issues a statement with every rate announcement. Because the decision 

itself is usually highly anticipated, the wording of the FOMC statement is usually as important if 

not more important than the actual interest rate move made by the central bank. The FOMC 

statement contains the Fed's collective outlook on the economy as well as hints about future 

monetary policy while the change to interest rates is nothing more than a number. The statement 

provides clues on plans for the future. When it comes to interest rates, the future direction of rates 

is usually far more important than its current rate 

Ramifications for the U.S. Dollar 

Interest rate hike : The US dollar generally rallies on the back of an interest rate hike because 

the hike increases the yield offered by US assets. This attracts foreign investment into the US 

which tends to be positive for the dollar. The strength of the reaction will depend on how much 

the market has already priced in the decision as well as the whether the FOMC statement hints at 

more rate hikes to come. 

Interest rate cut : An interest rate cut tends to be perceived as bearish for the US dollar because 

the cut reduces the yield offered by US assets. The perception is that the economy has 

weakened enough that the Federal Reserve is forced to either reduce monetary tightening or 

increase the stimulus in the market to reignite growth. The strength of the reaction will depend on 

how much the market has already priced in the decision as well as the whether the FOMC 

statement hints that more rate cuts are to come.

Rates Left Unchanged : The reaction of the US dollar will depend upon whether the Fed is 

pausing after a prolonged tightening or easing cycle or has been pausing for some time. If it 

comes after a tightening cycle, it would be perceived as dollar bearish. If it is after an easing cycle, 

it would be perceived as dollar bullish. If they have been pausing for months already, the reaction 

would probably be more neutral. 


Release schedule : 2pm (EST); 8 times a year 

Source of report : Board of Governors of the Federal Reserve System 

Web Address : http://federalreserve.gov/ 

Address of release : http://federalreserve.gov/fomc/fundsrate.htm 

Minutes of FOMC Meeting - United States 

The Federal Open Market Committee (FOMC) began publishing the minutes for its monetary 

policy meetings in 2005. The detailed minutes from these meetings give some of the best insight 

into the monetary policy decision making process and what the FED thinks about economic 

developments inside and outside of the US . 

Markets tend to focus most of their attention on the key points discussed during the meeting that 

suggest future interest rate changes. For example if the minutes state that high energy costs and 

a rapidly expanding housing market are fueling inflation, then markets participants will tend to 

monitor these key sectors closely in order to gauge the likelihood of a rate increases in the future. 

Because minutes come out three weeks after the FOMC meets, markets will discount some 

information in the report. Market participants tend to read into the overall mood the Federal 

Reserve gives during the meeting. If the FOMC is cautious about the inflationary outlook for the 

economy (characterized as "Hawkish"), then the market has a higher likelihood of future rate 

increases. If the Bank is optimistic ("Dovish") it suggests to markets that inflation is in check and 

that future rate increases are less likely. 


Release Schedule : Three weeks after the date of the policy decision 

Source of Report : Board of Governors of the Federal Reserve 


Address of Release : http://federalreserve.gov/fomc/

Fed Governor Speaks - United States 

The seven members of the Board of Governors have voting power in all three monetary tools of 

the Federal Reserve- open market operations, the discount rate, and reserve requirements. This 

makes the Board of Governors one of the most influential entities in governing U.S. monetary 

policy. Their speeches are important opportunities for markets to better understand Fed goals for 

the US economy and monetary policy, as well as understand the stance Governors take on 

significant economic issues. If the overall sentiment of the Governors is different from 

expectations, markets tend to move immediately in response to potential changes in future 

policies. 


Release schedule : No set schedule 



Address of release : http://federalreserve.gov/newsevents.htm 

Fed President Speaks - United States 

There are 12 Federal Reserve Presidents, each from a different district of the country. All 

Reserve Bank Presidents attend the meetings of the Federal Open Market Committee (FOMC), 

but only five are allowed to vote on monetary policy. Although markets pay attention to all 

Presidents for their assessment of overall economic health, particular interest is focused on the 

comments of the voting members. As one of the most influential monetary policy tool, open 

market purchases can affect the money supply and move short-term interest rates. Speeches 

made by voting members are opportunities for markets to better understand the FOMC and its 

monetary policy goals, but even non-voting members may give insight into the direction of 

monetary policy in their statements. If a speech suggest sentiment in the FOMC is different from 

expectations, markets tend to move immediately. 

Markets focus heavily on the language used in speeches. If the President is cautious about the 

inflationary outlook for the economy ("Hawkish"), then the market sees a higher likelihood of 

future rate increases. Optimism in the President's outlook ("Dovish") would suggest to markets 

that inflation is in check and that future rate increases are less likely, with the possibility of 

declines in rates.

On a Technical Note: The Federal Open Market Committee (FOMC) consists of twelve members- 

-the seven members of the Board of Governors of the Federal Reserve System; the president of 

the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank 

presidents, who serve one-year terms on a rotating basis. 


Release schedule : Not set schedule 



Address of release : http://federalreserve.gov/newsevents.htm 

Employment - (Non Farm Payrolls and 

Unemployment Rate) United States 

One of the most widely anticipated reports on the US economic calendar, the 

Employment Situation is a timely report that gives a picture of job creation, loss, 

wages and working hours in the United States. Data in the report relies on the 

Household Survey and the Establishment (or Payroll) Survey. While the Household 

Survey is based on the interviews to US households, the Establishment Survey 

queries business establishments, making it the preferred source of data. The 

Employment Situation's has many significant figures such as: Change in Non Farm 

Payrolls, Unemployment, Manufacturing Payrolls, and Average Hourly Earnings. 

The headline figures for this report are reported monthly, as the total number of new jobs in 

thousands (say, 120K new jobs), and the unemployment rate. 

Change in Non-farm Payrolls 

Monthly change in employment excluding the farming sector. Non-farm payrolls is the most 

closely watched indicator in the Employment Situation, considered the most comprehensive 

measure of job creation in the US. Such a distinction makes the NFP figure highly significant, 

given the importance of labor to the US economy. Specifically, political pressures come into play, 

as the Fed is responsible for keeping employment in a healthy range and utilizes interest rate 

changes to do so. A surge in new Non-farm Payrolls suggests rising employment and potential 

inflation pressures, which the Fed often counters with rate increases. On the other hand, a 

consistent decline in Non-farm Employment suggests a slowing economy, which makes a decline 

in rates more likely.


The percentage of people registered as unemployed in the United States. The figure is calculated 

by dividing the number of unemployed individuals in the labor force by the total labor force. 

Where the headline figure Change in Non-Farm Payrolls generally moves the market upon 

release, the Unemployment Rate serves as the most popular snap-shot figure for current labor 

conditions in the US. 

The unemployment figure can give insight into the economy's production, consumption, earnings, 

and consumer sentiment. A lower unemployment rate equates to increased expenditure, as more 

people have jobs and wages to spend. Increased expenditure encourages economic growth, 

which can spark inflation pressures. Conversely, high levels of unemployment signal economic 

instability and weakened demand. 

Persons are considered unemployed if they are able and willing to work but without a job and 

have actively sought employment within the last four weeks. The labor force includes all 

employed and unemployed individuals 16 years and older. 

Manufacturing Payrolls 

Measures job creation or loss in manufacturing sector. Manufacturing Payroll is reported as the 

net change in jobs from the previous month's figure. The figure is significant as an indicator of the 

health of the manufacturing sector. A high Manufacturing Payrolls number can signal increased 

demand for manufactured goods and a subsequent increase in production. 

Average Hourly Earnings 

An indicator of how the average level of pay is changing. The Average Hourly Earnings figure 

provides insight into future spending and inflation. A High Average Hourly Earnings bodes well for 

future consumption, as workers have more disposable income. High figures may indicate 

inflationary pressures due to employee's additional potential to spend. The figure is either 

measured in hourly or weekly averages or as a percent change from the previous month. 


Release schedule: 8:30 (EST); monthly, usually first Friday of every month 

Revisions schedule: previous two months, can be major, benchmark changes every 10 years 


Web Address: http://www.bea.gov/ 

Address of release:http://www.bls.gov/news.release/empsit.toc.htm, View Release Schedule

AKA: Change in Non farm payrolls, New Job Creation, Payroll Data, Employment Rate, 


Unemployment Rate - United States 

The US Unemployment Rate reflects the percentage of people considered 

unemployed in the United States. Unemployment is the single most popularly used 

figure to give a snapshot of US labor market conditions. Because the Federal 

Reserve is under strict pressure to keep unemployment under control, high 

unemployment puts downward pressure on interest rates, as the Fed will look to 

bolster the economy to remedy the employment situation. 

More generally, unemployment is indicative of the economy's production, private consumption, 

workers' earnings, and consumer sentiment. A lower unemployment rate translates into more 

employed individuals with paychecks, which leads to higher consumer spending, economic 

growth and potential inflationary pressures. Conversely, high levels of unemployment are 

connected with lower incomes, lower spending, and economic stagnation. 

Note: The figure is calculated by dividing the number of unemployed individuals in the labor force 

by the total labor force. Technically, Unemployment Rate = (# Unemployed Persons in Labor 

Force) / (Total # Persons in Labor Force). Persons are considered unemployed if they are able 

and willing to work but without a job and have actively sought employment within the last 4 weeks. 

The labor force includes all employed and unemployed individuals 16 years and older. Thus 

Unemployment could technical alter based on changes in the number of people in the people in 

the workforce, or changes in the number of people looking for employment. 


Release schedule : 8:30 (EST); monthly, usually first Friday of every month, 

Revisions schedule : previous two months, can be major, benchmark changes every 10 years 


Web Address : http://www.bls.gov/home.htm 

Address of release : http://www.bls.gov/news.release/empsit.toc.htm

Building Permits - United States 

The number of new building projects authorized for construction. Because receiving a Building 

Permit is the first step in the construction process, the figure is used as the earliest indicator for 

developments in the housing market. Additionally, because of the high outlays needed for 

construction projects an increase in Building Permits implies an increase in investment and 

corporate optimism. Finally, the figure gives insight into consumer activity, since new home 

purchases are associated with an increase in sales of "big ticket" durable goods. Given such 

connections to consumer and corporate sentiment, real estate generally leads economic 

developments - thriving at the start of a boom and waning at the onset of recession . 

Considering the above, one would expect the Building Permits figure to significantly move 

markets. After all, Building Permits is a part of the Conference Board's Leading Indicators index 

used to forecast US growth. However, the timeliness of the figure comes at a cost. The report is 

far removed from end market impacts, making it a less market-moving figure. 

The report headline number is expressed in total volume of permits issued and percentage 

change from 


Release schedule : 8:30 AM (EST); monthly, two or three weeks after the reporting month 

Source of report : U.S. Census Bureau 

Web Address : www.census.gov 

Address of release : www.census.gov/const/www/newresconstindex.html 

Construction Spending - United States 

Construction spending gauges the level of construction activity in the United States . The 

Construction Spending report looks at both residential and non-residential construction. The 

construction industry makes a significant contribution to the United States GDP in the form of 

investment expenditure as well as stimulus of industries related to building. Furthermore, since 

builders are unlikely to pour money into construction projects unless they feel the economy favors 

their investment, changes in business sentiment like this are usually quickly seen in construction 

figures. However, the report has little significance for market participants because of its untimely 

release. By the time the report is announced other reports, such building permits and building 

starts have already provided similar information. 

The report headline is the percentage change from the previous month.

Technical notes: The construction industry is a major force to the United States economy, even 

without including non-construction businesses that are tied to building, such as finance, the 

furnishing industry, appliance industry and other manufacturing. Private Construction activity can 

be an effective indicator of business confidence. 


Release schedule : 10:00 AM (EST); monthly, five weeks after the reported month 

Revision schedule: previous two months with new release, can be major 


Web Address : http://www.census.gov 

Address of release : http://www.census.gov/const/www/c30index.html 

Housing Starts - United States 

Gauges the change in the number of new houses built in the United States. Housing 

Starts are one of the earliest indicators of the housing market, only trailing Building 

Permits in timeliness. 

Because high outlays are needed to start construction projects, an increase in Housing Starts 

implies an increase in investment and business optimism. Finally, the Housing Starts figure gives 

insight into consumer activity, since new home purchases typically require a large investment for 

consumers. Given such connections to consumer and corporate sentiment, real estate generally 

leads economic developments. A sharp drop in new home construction is a warning signal of 

economic slowdown. Conversely, a rebound in the Housing Starts paves the way for economic 

recovery. 

Housing Starts data is differentiated by building types (single family houses, 2 to 4 residence 

units and 5 or more residence units). The single family housing starts is a more reliable economic 

indicator than multi family housing starts, as single family house building is driven by demand and 

consumer confidence, whereas multi family house building is more often motivated by speculative 

real estate investors. The report headline is expressed in volume of houses built. The figures are 

in the thousands of units. 


Release schedule : 8:30 AM (EST); monthly, two or three weeks after the reporting month 


Web Address : www.census.gov 

Address of release : www.census.gov/const/www/newresconstindex.html

MBA Mortgage Applications - United States 

Gauges demand for mortgage application in the US . Tracking new home mortgages and 

refinances, MBA Mortgage Applications Survey serves at a current indicator for the US housing 

market. Growth in mortgages suggests a healthy housing market. Due to the multiplier effect 

housing has on the rest of the economy, rising activity suggests increased household income and 

economic expansion. The headline figure is the weekly percentage change in the MBA Mortgage 

Applications figure. 

Among the various indices measured in the survey, the purchase index and refinancing index 

most accurately reflect where the housing market is headed. The purchasing index measures the 

change in existing home sales in all mortgage applications, while the refinance index measures 

the mortgage refinancing activity in all mortgage applications. 

Note: Due to volatility in the sector, markets also focus on the four week moving averages. 


Release schedule : 7:00 AM (EST); weekly, every Wednesday with previous week report 

Revisions schedule : At this point we are unclear 

Source of report : Mortgage Bankers Association 

Web Address : http://www.mortgagebankers.org 

Address of release : http://www.mortgagebankers.org/NewsandMedia/PressCenter 

AKA : Mortgage Applications Survey 

Pending Home Sales - United States 

Tracks residential housing contract activity of existing single-family homes. The Pending Home 

Sales report is an advanced read on trends in the US housing market. Housing is typically 

correlated to the overall state of the economy; particularly indicative of economic turning points. A 

sharp drop in housing demand typically acts as a warning signal of economic slowdown as 

buyers are reluctant to purchase houses when interest rates are high, disposable income is low,

or consumer confidence is low. Conversely, a rebound in the housing market is often a leading 

indicator of an economic recovery. 

The report headline is expressed in percentage change in pending home sales from previous 

month. 


Release schedule : 10:00 AM (EST); monthly, 4 weeks after reporting month 

Source of report : National Association of Realtors 

Web Address : http://www.realtor.org| 

Address of release : http://www.realtor.org/Research.nsf/Pages/PHSdata 

New Home Sales - United States 

Records sales of newly constructed residences in the United States . The figure is a timely gauge 

of housing market conditions counting home sales when initial housing contracts are signed. 

Because New Home Sales usually trigger a sequence of consumption, they have significant 

market impact upon release. In addition to the high expenditure of the new home, buyers are 

likely to spend more money on furnishing customizing and financing their home. Consequently, g 

rowth in the housing market spurs more consumption, generating demand for goods, services 

and the employees who provide them. 

Generally the housing market is tracked by a number of reports that mark different stages of the 

construction and home sale process. The first stage is Building Permits, which precede Housing 

Starts, which lead to Construction Spending, MBA Mortgage Applications and, finally, New Home 

Sales and Existing Home Sales. As the headline housing figure, New Home Sales are believed to 

control for some of the volatility of other data. For instance, Building Permits and Housing Starts 

are considered more indicative of business confidence and production rather than consumer 

spending. And while Existing Home Sales figures are more indicative of consumer expenditures, 

they are lagging indicators with less predictive value. New Home Sales numbers are considered 

confirmatory of housing trends and still predictive of consumer spending. 

New Home Sales is also a good indicator of economic turning points due to its sensitivity to 

consumer income. Buying a house is always a major expenditure, typically only undertaken when 

consumers have sufficient savings or are optimistic about future earnings. Historically, when 

economic conditions slow, New Home Sales are one of the first indicators to reflect the change.

By the same token, New Home Sales undergo substantial growth when the economy has 

emerged from recession and wages have begun to pick up. 

The report headline is the total amount of properties sold. 


Release schedule : 10:00 (EST); monthly, four weeks after the reporting month 

Revisions schedule : frequent revisions cover the preceding three months 


Web Address : http://www.census.gov 

Address of release : http://www.census.gov/const/www/newressalesindex.html 

Existing Home Sales - United States 

Records sales of previously owned homes in the United States . This report provides a fairly 

accurate assessment of housing market conditions, and because of the sensitivity of the housing 

market to business cycle twists, it can be an important indicator of overall conditions at times 

when housing is particularly important to the economy. 

While used home sales are not counted in GDP, they do affect the United States economy. 

Sellers of used homes often use capital gains from property sales on consumption that stimulate 

the economy. Higher levels of consumer spending may also increase inflationary pressures, even 

as they help grow the economy. 

The existing home sales report is not as timely as other housing indicators like New Home Sales 

or Building Permits. By the time the Existing Home Sales are recorded, market conditions may 

have changed. 

The headline is the total value of properties sold. 


Release schedule : 10:00 AM (EST); monthly, mid-month and covers the same month 

Source of report : National Association of Realtors 

Web Address : http://www.realtor.org 

Address of release : http://www.realtor.org/Research.nsf/Pages/EHSdata

NAHB Housing Market Index - United States 

A timely gauge of home sales and expectations for future home building. Based on a small 

sample of homebuilders, the Housing Market Index is a timely indicator of future US home sales. 

However, as the index is not as comprehensive as formal housing reports like new home sales or 

MBA mortgage applications, the index acts more like a supplemental indicator for predicting 

housing trends. 

As such, the NAHB Housing Market Index is still able to provide general insight to where the 

housing market is heading. Given that new home sales reflect 'big ticket' items that require 

construction and investment, the housing market is often viewed as an indicator of the direction of 

the economy as a whole. Growth in the housing market will spur subsequent spending, 

generating demand for goods and services and the employees who provide them. 

The report headline is expressed in percentage change from the previous month. 

As a Technical Aside: The NAHB Housing Market Index divides the Single-Family Sales data into 

three categories: Present, Next 6 Months and Prospective Buyers Traffic. 


Release schedule : 1:00 PM (EST); monthly, mid-month and covers the same month 

Source of report : National Association of home Builders 

Web Address : www.nahb.org 

Address of release : http://www.nahb.org/ (type "HMI" in search box)

PCE Deflator, (Personal Consumption Expenditure ... - Morningbull

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