Market-Moving Economic Indicators: Quick Cheat Sheet

Happy Sunday everyone.

I know as investors we look at a lot of economic indicators and reports that come out monthly. It’s easy to get caught up in these numbers and become overwhelmed by the data. I wanted to do a quick cheat sheet.

Let’s dig in…

Core Inflation Indicators

Consumer Price Index (CPI)

• What: Measures average price changes in consumer goods and services

• Release: Around 13th of month at 8:30 AM ET

• Key Points:

  • Core CPI excludes volatile food and energy prices

  • Higher than expected readings typically cause market declines

  • Lower than expected readings typically cause market gains

• Food & Energy Price Tracking:

  • CPI Food Index: Monthly food price changes at consumer level

  • CPI Energy Index: Monthly energy price changes at consumer level

  • Both released with main CPI report

• Additional Price Reports:

  • Energy: EIA Weekly Petroleum Status (Wednesdays) and Natural Gas Update (Thursdays)

  • Food: USDA Monthly Food Price Outlook and WASDE Report

• Market Impact: Major market mover, especially for bonds and rate-sensitive stocks

Producer Price Index (PPI)

• What: Measures wholesale price changes at producer level

• Release: Around 14th of month at 8:30 AM ET

• Key Points:

  • Leading indicator for CPI

  • Core PPI (excluding food/energy) shows underlying trends

  • Rising PPI often signals future consumer price increases

• Market Impact: Important leading indicator for consumer inflation

Personal Consumption Expenditures (PCE)

• What: Federal Reserve's preferred inflation measure

• Release: End of month

• Key Points:
  

  • PCE considers how consumers change their buying habits when prices change. For example, if beef prices rise, people might buy more chicken instead. CPI doesn't capture this switching behavior, but PCE does.
    

  • The Fed has explicitly stated their target is 2% average inflation a year on avg.
    

  • Fed’s preferred inflation gauge because they consider it more accurate than CPI for measuring underlying inflation trends.
    

• Market Impact: Critical for Federal Funding Rate decisions and gauging inflation trends.

Employment Indicators

Non-Farm Payrolls Report

• What: Monthly employment changes

• Release: First Friday at 8:30 AM ET

• Key Metrics:

  • Strong: Over 200,000 jobs added

  • Weak: Under 100,000 jobs added

  • Target unemployment rate: ~4%

  • Watch wage growth for inflation signals

• Market Impact: Major market mover

Weekly Jobless Claims

• What: New unemployment claims

• Release: Every Thursday at 8:30 AM ET

• Key Levels:

  • Strong economy: Under 200,000 claims

  • Warning sign: Over 300,000 claims

JOLTS Report

• What: Job openings and turnover data

• Release: First Tuesday at 10:00 AM ET

• Key Metric: Ratio of job openings to unemployed workers

• Significance: Fed monitors for labor market tightness

Growth Indicators

Gross Domestic Product (GDP)

• What: Total economic output

• Release: Quarterly with three revisions

• Key Points:

  • Healthy growth: 2-3% annually

  • Technical recession: Two negative quarters

  • Consumer spending component represents 70% of GDP

• Market Impact: Major, especially preliminary release - as wee know the market hates surprises

ISM Manufacturing Index

• What: Factory activity survey

• Release: First business day at 10:00 AM ET

• Key Levels:

  • Above 50: Economic expansion

  • Below 50: Economic contraction

• Important Component: New Orders

• Market Impact: Strong predictor of economic trends

Retail Sales

• What: Consumer spending at stores and restaurants

• Release: Around 15th of month at 8:30 AM ET

• Key Points:

  • Ex-auto number removes volatile car sales

  • Holiday season numbers particularly significant

• Market Impact: Direct measure of consumer health

Housing Market

Housing Starts

• What: New residential construction

• Release: Around 17th of month at 8:30 AM ET

• Significance:

  • Impacts construction jobs, materials, and appliances

  • Leading indicator for consumer confidence

• Market Impact: Broad economic indicator

Federal Reserve Decisions

Federal Funds Rate

• What: Target interest rate for bank overnight lending

• Release: Eight meetings per year

• Key Watch Points:

  • Rate decision

  • Forward guidance language

  • Economic projections

  • Press conference tone

• Market Impact: Significant across all asset classes

Best Practices

Timing Considerations

• Most significant releases at 8:30 AM ET

• Strongest market reaction in first 15-30 minutes

• Pre-market futures indicate initial reaction

Context Matters

• Compare to consensus expectations

• Review revisions to previous months

• Focus on trends rather than single readings

Connecting the Dots

• Inflation data tends to influence Fed policy the most

• Employment affects consumer spending

• Housing impacts multiple broad sectors

*Markets can react differently based on broader context and that this is meant as an educational reference rather than investment advice. (Duh)

Stay Curious 🙂 

-John

Sponsor

Learn AI in 5 minutes a day

What’s the secret to staying ahead of the curve in the world of AI? Information. Luckily, you can join 800,000+ early adopters reading The Rundown AI — the free newsletter that makes you smarter on AI with just a 5-minute read per day.

Sign up to start learning.