Everything you need to easily get a handle on economic indicators

In today's volatile, often troubling economic landscape, there are myriad statistics and reports that paint an economic picture that can sometimes resemble a work by Jackson Pollock. These complex and often-conflicting reports could vex even the savviest investor. Economic Indicators For Dummies explains how to interpret and use key global economic indicators to make solid investments, aid in business planning, and help develop informed decisions. In plain English, it breaks down the complex language and statistics to help you make sense of this critical information.

You'll discover how to interpret economic data within the context of other sometimes-conflicting reports and statistics, and use the information to make profitable decisions. You'll understand the meaning of such data as employment indices and housing and construction stats and how they affect stocks, bonds, commodities and international markets . . . and how you can use these statistics to make investment decisions as well as plan strategic goals for business growth. Economic Indicators For Dummies breaks down dozens of statistics and patterns to give you a better understanding of how various sources of data and information can be used.

• Breaks down jargon and statistical concepts
• Covers how to use publicly available economic indicators to better position your portfolio, improve returns, and make sensible, long-range business plans
• Discusses the reliability and timeliness of the collected data, while helping investors prioritize the flow of economic information to avoid information overload

Whether you're an investor, economics student, or business professional involved in making key strategic decisions for your company, Economic Indicators For Dummies has you covered.

Michael Griffis, MBA, has been an active trader for more than two decades. He has written about stock trading for online audiences, and today writes about investing and marketing for clients in the banking and brokerage industries.

Introduction 1

About This Book 1

Conventions Used in This Book 2

Foolish Assumptions 3

What Not to Read 4

How the Book Is Organized 4

Part I: Figuring Out the Economy 4

Part II: Making Money, Spending Money: Employment and Consumer Indicators 4

Part III: The Essence of Business: Product and Service Indicators 5

Part IV: Inflation, Productivity, Interest Rates, and Commodities: Oh My! 5

Part V: International Intrigue: Indicators beyond the United States 5

Part VI: The Part of Tens 6

Icons Used in This Book 6

Where to Go from Here 6

Part I: Figuring Out the Economy 7

Chapter 1: Introducing Economic Indicators 9

Understanding What Economic Indicators Are 10

Reading the economy through economic indicators 10

Cycling through economic ups and downs 11

Identifying What Indicators Indicate 12

Tracking consumer spending 12

Looking at the big picture 13

Eyeing manufacturing 14

Counting up the number of bought, sold, and newly built homes 15

Monitoring inflation 15

Measuring productivity 16

Looking at loans and commodity purchases 16

Following worldwide economies 17

Knowing How to Start Following Economic Indicators 18

Analyzing the data 19

Tracking economic indicator release dates 19

Chapter 2: Explaining Economic Jargon 21

Identifying Types of Economic Indicators 21

Summarizing economic results 22

Surveying for information 22

Indexing the economy 24

Understanding How Economists Analyze the Data 27

Measuring growth 27

Annualizing reported data 29

Smoothing data with moving averages 32

Massaging Economic Data to Make the Results More Useful 35

Adjusting for inflation 35

Adjusting for seasonal fluctuations 37

Considering the Timeliness of Economic Indicators 37

Leading indicators make forecasts 38

Coincident indicators are no coincidence 38

Lagging indicators can't foretell the future 39

Looking into the Future with Consensus Forecasts 39

Finding consensus forecasts 40

Analyzing the accuracy of the consensus 40

Amending and Modifying Data with Revision Reports 41

Revising previous reports 41

Changing benchmarks 42

Cha-Ching: Money, Interest Rates, and the Economy 43

Understanding the Fed's monetary measures 43

Setting short- and long-term interest rates 44

Chapter 3: Understanding the Big Picture: The Economy and Its Footprints 45

Taking a Closer Look at the Business Cycle 46

Identifying the phases of the cycle 46

Growing into expansion 49

Slowing into recession 49

Reviewing the Key Financial Markets 50

Investing in stocks 50

Holding bonds 53

Trading commodities 55

Tracking currencies 56

Figuring Out What's What in Economic Reports 57

Finding what's important in each report 58

Seeing how reports are assembled 59

Showing Economic Fashions without the Runway 59

Understanding market sensitivity 60

Determining an indicator's accuracy and timeliness 61

Seeing who's interested in what 61

Part II: Making Money, Spending Money: Employment and Consumer Indicators 65

Chapter 4: Counting Jobs and Unemployment 67

Tracking the BLS Employment Situation Report 68

Counting workers and the unemployed 68

Highlighting key parts of the jobs report 73

Deciphering employment numbers 75

Predicting market reactions due to employment changes 77

Looking at Unemployment Insurance Claims 79

Keeping track of unemployment insurance claims 80

Smoothing jobless claim fluctuations 81

Analyzing the claims numbers 82

Determining how the market may react to increased claims 82

Eyeing the ADP National Employment Report ® 84

Reviewing key parts of ADP's jobs report 85

Comparing the ADP and BLS reports 86

Figuring out how the market will react to the ADP report 87

Advertising for Jobs: The Conference Board Help Wanted Online Index 88

Measuring the availability of jobs online 88

Predicting how the market will react 89

Collecting the BLS Mass Layoff Statistics Report 90

Surfing Monster Employment Indexes 91

Chapter 5: Survey Says: Considering Consumer Sentiment, Confidence, and Comfort 93

Trying to Figure Out Consumers 94

Surveying UM's Consumer Sentiment Index 95

Eyeing the importance of this index 95

Considering the consumer's expectations 96

Correlating consumer sentiment and spending: What the data mean 97

Looking for unexpected changes 99

Knowing how the markets will react 100

Understanding the Consumer Confidence Index 100

Seeing how people feel about the economy 101

Looking for happy consumers 103

Comparing and contrasting surveys 103

Finding surprises in the confidence survey 106

Adjusting your portfolio strategy 107

Reviewing the Bloomberg Consumer Comfort Index 108

Justifying another consumer survey: What makes this one unique 109

Correlating comfort, recovery, and recession 109

Modifying your portfolio strategy 112

Chapter 6: Spreading the Wealth: Consumer Spending and the Economy 113

Making and Spending: The BEA's Personal Income and Outlays Report 113

Tracking personal wages, savings, and purchases 115

Highlighting consumers' economic im…