Just the facts...
| Overall Economic Outlook June = 69; May = 69; April = 70 (>80 = robust; <30 = weak) |
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| (How the economic outlook is calculated.) | ||||||
| Contents: | ||||||
| Business Cycle Indicators 6 |
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Economic Measures
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Other Economic Indicators
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| Business Cycle Indicators: | ||||||
| Econ P.I. selects business cycle indicators based on their track record of signalling economic conditions. Follow these 15 indicators and you will understand the current state of the economy, including clear warnings of a recession. Red headings mark the most recent updates. |
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| Consumer Sentiment - June End-of-Month (released 6/30) | ||||||
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Current University of Michigan release... Importance: The Index of Consumer Sentiment, published by the University of Michigan, measures the optimism that consumers feel about the economy and their own personal well-being. |
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| Weekly Unemployment Claims, Monthly Average - June | ||||||
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Current Department of Labor release... Importance: Historically, unemployment claims have steadily increased a year or more prior to recessions. |
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| Building Permits - May (released 6/26) | ||||||
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Current Department of Commerce release... Importance: Building permits are considered to be a leading indicator. According to the National Association of Realtors, housing and housing related services account for approximately 15% of GDP. |
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| JOLTS - End of May (released 7/11) | ||||||
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Current Department of Labor release... Importance: Job openings trend closely with overall economic growth. JOLTS data is taken from "a sample of nonfarm establishments" and is subject to significant monthly revisions. Due to its volatility, following a three-month moving average is recommended. Measuring job openings per 100 persons in the workforce provides better comparative data from year to year. |
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| Temporary Employment - June (released 7/7) | ||||||
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Current Fed data release... Importance: Historical data shows that temporary workers are generally the first hired and fired by firms as economic conditions change, making temporary employment a useful leading indicator. |
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| Real Retail Sales Per Capita - June (released 7/14) | ||||||
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Current Department of Commerce release... Importance: Retail sales are viewed as a coincident indicator, meaning that it reflects the current state of the economy. |
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| ISM Nonmanufacturing (NMI®) - June (released 7/6) | ||||||
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Current ISM release... Importance: The nonmanufacturing sector accounts for approximately 80% of economic output. Readings above 50 indicate this sector is expanding. Readings below 48.9 have coincided with negative growth in the overall U.S. economy. |
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| Cass Freight Index TM - 2017 Estimate | ||||||
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Current Cass release... Importance: The annualized CFITM shows a clear pattern of decline prior to recessions. The index is annualized because of its highly seasonal nature, making it easier to spot trends from year to year. 1990 has a base year value of 1.0. (Due to seasonal variations, 2017 is estimated until 5 months of data are available.) |
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| St. Louis Fed Financial Stress Index, June Monthly Average | ||||||
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Current Fed data release... Importance: The St. Louis Fed states that the "STLFSI measures the degree of financial stress in the markets..." A zero value indicates normal market conditions,while a value above zero indicates above-average financial market stress. Values at or near "1" have normally occurred prior to recessions. |
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| Yield Curve Spread, June Monthly Average | ||||||
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Current Fed data release... Importance: Research has shown that a steeper curve (higher number) indicates stronger economic growth. Historically, the yield curve spread turns negative prior to recessions and credit crunches, with a lag of approximately one year. The spread shown here is the difference between 10-year Treasury notes and 3-month Treasury bills. |
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| Small Business Optimism - June (updated 6/14) | ||||||
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Current NFIB release... Importance: The sentiment of small business owners has generally signaled overall economic conditions. The optimism reading is taken from a monthly survey of small business owners. |
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| Real Corporate Profits, 4Q 2016, 2nd Estimate (update 3/31) | ||||||
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Current Department of Commerce release... Importance: Corporate profits are a main driver of economic activity. Adjustments for IVA and CCAdj provide a consistent measure of profits from year to year, as they smooth the effects of changes to depreciation and valuation. |
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| Real Net Domestic Private Investment, 1Q 2017 (updated 4/28) | ||||||
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Current Fed data release... Importance: Increases or decreases in net private investment indicate changes in the future productive capacity of the U.S. |
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| Vehicle Sales - April (updated 5/28) | ||||||
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Current Fed data release... Importance: Vehicle sales provide another measure of consumer confidence. Due to the volatility of vehicle sales, the three-month exponential moving average is a better measure for tracking this indicator. |
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| Existing Home Sales - May (released 6/21) |
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Current NAR release...  Importance: Existing home sales are a complementary measure to new building permits, which is a gauge of new construction. This measure has wide data variations from month to month, making the three-month EMA a better measure to follow. |
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| Big Three Economic Measures: | ||||||
| GDP, inflation, and employment are used to gauge overall economic conditions. | ||||||
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| Real GDP, 1Q 2017, 3rd estimate (released 6/29) | ||||||
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| Real GDP per capita, 4Q 2016, based on 2nd estimate (released 5/26) | ||||||
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Current Department of Commerce release... |
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| Consumer Price Index - June (released 7/14) | ||||||
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Current Department of Labor release... |
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| Department of Labor employment - June (released 7/7) | ||||||
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Current Department of Labor release... |
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| Other Key Economic Indicators: | ||||||
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| Real disposable personal income per capita - March (released 5/1) | ||||||
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Current Department of Commerce release... Importance: The U.S. Bureau of Economic Analysis defines disposable personal income as "personal income less personal current taxes. It is income available … for spending or saving." Disposable income that is spent is referred to as personal consumption expenditures (PCE). Disposable income that is not spent is savings. Changes in PCE signal the confidence that consumers have in the economy, both now and in the near future. |
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| Industrial production and capacity utilization - May (released 6/15) | ||||||
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Current Fed data release... Importance: Industrial production and capacity are considered to be coincident indicators because they reflect current economic conditions. Capacity utilization below 80% indicates there is slack in the economy. Manufacturing, mining, and utilities account for approximately 16 percent of GDP. |
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| Chicago Fed National Activity Index - April (released 5/22) | ||||||
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Current Fed data release... Importance: The CFNAI gauges "overall economic activity and related inflationary pressures." Positive values indicate above-average growth and negative values indicate below-average growth. A three-month moving average of -0.70 generally indicates a recession has started. |
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| Credit Managers' Index - May (updated 5/31) | ||||||
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Current NACM release... Importance: The National Association of Credit Managers describes the CMI as an "accurate, predictive bench-marking tool." Readings above 50 indicate credit is expanding. |
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| Real average hourly earnings - June (released 7/14) | ||||||
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Current Department of Labor release... Importance: Gains in real hourly earnings indicate that wage increases exceed inflation. Higher real wages encourage consumer spending, spurring economic growth. |
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| ISM manufacturing (PMI®) - June (released 7/3) | ||||||
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Current ISM release... Importance: Manufacturing continues to be a significant contributor to economic growth. Readings above 50 indicate this sector is expanding. Readings below 43.2 coincide with overall economic slowdowns. |
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| Real durable goods new orders - May Full Report (released 7/5) | ||||||
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Current Department of Commerce release... Importance: Durable goods new orders serve as a leading indicator of economic activity. |
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| Productivity, 1Q, 2017: Revised (released 6/5) | ||||||
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Current Department of Commerce release... Importance: When productivity increases, the same amount of resources can produce more goods or services. Higher productivity leads to a higher standard of living. |
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| Other Measures: | ||||||
Fed Outlays % GDP Interest on Debt % GDP  Jobs  Participation Rate  |
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| The problem with putting two and two together is that sometimes you get four, and sometimes you get twenty-two.” ― Nick Charles, The Thin Man | ||||||
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