This indicator is a measurement that calculates output per hour minus inflation. It basically measures the correlation between productivity per hour and compensation per hour. An increase in hourly compensation will of course increase unit labor costs. The only way to offset this cost is to facilitate higher labor productivity per hour. Higher trends seen in this indicator should positively affect the economy. This indicator is important to investors as wage inflation impacts consumer inflation, which will affect other economic indicators such as Gross Domestic Product, and interest rates.

The Unemployment Rate measures the total number of Americans that are unemployed and who are presently seeking employment. A downtrend seen in this indicator will have a positive effect on a countries overall economic strength. The Unemployment Report is considered a lagging indicator, and because if this, its not that highly regarded.

New Home Sales reports the number of new privately owned homes sold or for sale in a given period. It is generally reports figures about the sales for one month. New home sales numbers tend to lag slowly behind changes made to mortgage rates. The number of homes for sale in relationship to current sales prices is also measured. Any changes in these numbers will affect housing starts. The new home sales report is often subject to large revisions monthly numbers are often seen as unreliable. Because of this, the indicator’s potential impact on the market is rather inconsistent and investors tend to focused more on the existing home sales report which is released earlier in the month.

 

This manufacturing indicator, conducted by the Institute of Supply Management, surveys 400 firms in an attempt to gauge price inflation seen within the manufacturing sector. Firms are asked whether or not there has been an increase seen in the prices of materials and services. This would give investors a view as to what is happening in the market with inflation, and how the Fed might respond to any changes with interest rates.

ECI stands for Employment Cost Index is a measurement of inflation rates found within salaries, wages and benefits paid to non-government employees.  Monitoring wage inflation as a means to gauge pending consumer inflation, which will of course ultimately affect GDP (Gross Domestic Product), which in turn would affect the overall market.

 

PMI stands for Purchasing Managers Index. The Chicago PMI is conducted by the National Association of Purchasing Managers (NAPM). Purchasing managers in the area are surveyed on the present state of their purchasing activity. This activity includes, activities such as employment, inventories, prices, orders and output. A reading of 50 measure expansion, or the lack thereof. A reading above 50 would indicate economic expansion in the region.

The University of Michigan conducts this monthly survey. Respondents are asked to measure and evaluate both the present and the future strength of the economy. Consumer optimism will of course have a positive impact on the strength or weakness of an economy. When consumer confidence is high the purchase of goods and services tends to increase as well, thus stimulating economic growth.

Core Durable Goods Orders essentially reports the same data as does ‘Durable Goods Orders’ minus data including Transportation components.

Purchase orders for aircraft and automobile components often see rapid increases for brief periods and thus distorts month to month and year over year comparisons