Producer Price Index

The Producer Price Index (PPI) looks at the average change in selling prices from the viewpoint of domestic producers of both goods and services. Three areas of production are observed: industry-based, commodity-based, and commodity-based final demand-intermediate demand. Investors look to the producer price index, which is a more relevant way of gauging inflation than CPI because of the large basket …

Consumer Price Index

The Consumer Price Index (CPI) tells us of any inflationary pressures in the economy.  The CPI measures the average price levels of a basket of goods and services purchased by consumers.  The index starts with a base time period (1982-1984, currently) and shows the overall increase since that time. As with many economic indicators, it can be volatile from month …

Job Openings and Labor Turnover

The JOLTs report is the Job Openings and Labor Turnover Survey (as of February 2020) that tracks several trends in evaluating the labor market. Through JOLTs, we can see voluntary and involuntary separations from employment in addition to new job openings and hires that have taken place. Job openings from January to February have decreased by 130,000 from a rate …

M2 Money Stocks

M2 Money Stock refers to the measure of money supply that includes financial assets held mainly by households such as savings deposits, time deposits, and balances in retail money market mutual funds, in addition to more readily-available liquid financial assets as defined by the M1 measure of money, such as currency, traveler’s checks, demand deposits, and other checkable deposits. The …

Oil Prices

The cost of oil is important because of the large amount that is used in American industries and purchased by consumers every day. The price-per-barrel of the West Texas Intermediate oil firm can be used to predict future costs of business; industries heavily reliant on oil and gas consumption like construction and transportation would be more economically affected than industries …

Change in Employment by Industry

This graph displays the seasonally adjusted employment change by industry in March 2020 in thousands. These numbers are calculated by taking the difference between the previous and current months total to jobs per industry to then determine how employment has shifted within a specific month. This chart is a good indicator to determine which industries are contracting or expanding within …

Non-Farm Payrolls

Nonfarm payrolls give an overview of the overall employment outlook of the US economy; nonfarm payrolls do not include those employed in agriculture because of the seasonal nature of their work. This report obtains these numbers from 142,000 businesses and government agencies to track the new jobs added in non-farming sectors of the economy. The unemployment rate is at 3.5%, …

Existing Home Sales

Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built.  Existing home sales give an indication of the demand for housing.  While home resales may not generate new construction jobs as housing starts do, they have a similar effect on consumer spending as people purchase items for their new home. Existing …

30-Year Fixed Mortgage

The 30-year fixed mortgage rate is very important to the home-buying market because it accounts for over 80% of financing. The 30-year fixed mortgage is influenced by the 10-year treasury rate of the Federal Reserve when the 10-year treasury rates fall the 30-year mortgage rate fall as well. The 30-year fixed mortgage increased to 3.65% in March, compared to 3.49% …

Architecture Billings Index

The Architecture Billings Index (ABI) is an indicator of commercial and industrial building activity. The Work-on-the-Boards survey is given to architecture firms each month to report how billing activity performed in the previous month. The ABI is a reliable tool for firms to track architectural movements in the market. Readings above 50 indicate rising levels of construction for non-residential buildings, …

Panic is not an investment strategy that works

Panic is not an investment strategy that works.  The nice part about the market is that we have an incredible amount of data on historical events and how the markets have responded.  Our current situation is no different.  Since February, the markets have dropped around 30%.  A bear market is when the markets are down 20% from their highs.  Normally …

Chemical Activity Barometer

The Chemical Activity Barometer (CAB) is a composite index, which is comprised of indicators drawn from a range of chemicals and sectors, including chlorine, alkalis, pigments, plastic resins and other selected basic industrial chemicals. It has been shown to provide a lead of 2 to 14 months, with an average lead of 8 months at cycle peaks as determined by …

Federal Funds Rate

The Effective Federal Funds Rate is the interest rate at which banks trade federal funds with each other. This rate is determined by the Federal Open Market Committee. The Federal Funds Rate influences the interest rates at which banks and credit card companies charge customers. As of March 1st, Federal Funds were 1.6%, a decrease from last year’s rate of …

International Trade Balance

The US international trade balance is compiled by America’s Customs Agency and represents the value of all goods traded between the US and foreign nations. The balance is then calculated by subtracting total imports from total exports. A negative balance means that imports are more than exports, a positive trade balance means that exports are greater than imports. The international …

Producers Price Index

The Producer Price Index (PPI) looks at the average change in selling prices from the viewpoint of domestic producers of both goods and services. Three areas of production are observed: industry-based, commodity-based and commodity-based final demand-intermediate demand. Investors look to the producer price index, which is a more relevant way of gauging inflation than CPI because of the large basket …

Industrial Production Index

The Industrial Production Index (IPI) measures the manufacturing, electric, mining, and gas industries output on a monthly basis. Total Industrial production has remained steady over the past twelve months. The TTM high occurred in January 2019 at 110.1 and reached its lowest points of the past 12 months in April and October of 2019 at 109.0. Mining gained 0.2%, while …

ISM Manufacturing Index

The ISM Manufacturing Index is derived from a survey of purchasing managers and their outlook on overall conditions by looking at factors such as orders for durable goods, industrial production and hiring. It gives a general direction rather than the specific strength of the factory sector and manufacturing activity in the U.S. A reading above 50 is an indicator that …

Retail Sales

Retail Sales are the total amount of merchandise and related services sold to consumers.  It is considered a sign of strength of U.S. Consumer spending, which accounts for roughly two-thirds of the economy. This indicator also provides insight into which areas of the retail space are experiencing strong sales, such as auto sales. Food was excluded in the above charts …

S&P / Case-Shiller

The 20-city S&P/Case-Shiller index is a measure of existing home values across 20 metropolitan areas throughout the U.S. By comparing single family home prices in each district to the similar home prices over time, the index tracks how property values increase or decrease. Home values have a broad, significant impact on the economy, including the housing and consumer sectors. The …

Health Savings Accounts

The Health Savings Account (HSA) is one of the most powerful investment vehicles. Not only is it the only account that offers triple tax savings at the federal level (if funds are used for qualified medical expenses). HSA funds can be used as an additional source of retirement funds after the age of 65. However, there are several restrictions to …

Personal Income & Personal Expenditures

Consumer spending, measured by Personal Consumption Expenditures (PCE), makes up approximately two-thirds of the economy and is a direct measure of purchasing activity. PCE is a reliable indication of inflation because it is calculated from data acquired directly from the GDP report and businesses. We see where consumers are spending their dollars, whether it be durable and nondurable goods, or …

Consumer Price Index

The Consumer Price Index (CPI) tells us of any inflationary pressures in the economy.  The CPI measures the average price levels of a basket of goods and services purchased by consumers.  The index starts with a base time period (1982-1984, currently) and shows the overall increase since that time.  As with many economic indicators, it can be volatile from month …

Gross Domestic Product

Gross Domestic Product (GDP) is the broadest measure of economic activity within a country and measures the market value of all final goods and services produced within a country over a certain period.  There are four components GDP is created from:  investment (including residential and nonresidential expenditures), consumption (including durable goods, non-durable goods, and services spending), government spending, and net …

What is the Coronavirus going to bring us?

The current outbreak of the Coronavirus has brought me back to a book I read last summer called Get Well Soon, History’s Worst Plagues and the Heroes who Fought Them. What was fascinating about the book was not necessarily the disease, but how humanity reacted to them.  The world has lived through the nastiness of leprosy, polio, syphilis, and even …

ISM Non-Manufacturing Index

The ISM Non-Manufacturing Index helps determine the overall economic strength of the services sector.  Components evaluated are employment, business activity, new orders, and supplier deliveries; which are then compiled into an index.  The non-manufacturing sector represents a much larger share of the overall U.S. economy when compared to the manufacturing sector, making up approximately 80%; the sector’s economic weight makes …

International Trade Balance

The US international trade balance is compiled by America’s Customs Agency and represents the value of all goods traded between the US and foreign nations. The balance is the calculated by subtracting total imports from total exports. A negative balance means that imports are more than exports, a positive trade balance means that exports are greater than imports. The international …

ISM Manufacturing Index

The ISM Manufacturing Index is derived from a survey of purchasing managers and their outlook on overall conditions by looking at factors such as orders for durable goods, industrial production and hiring. It gives a general direction rather than the specific strength of the factory sector and manufacturing activity in the U.S. A reading above 50 is an indicator that …

Retirement Account Contributions

The IRS announced that contribution limits on 401(k)s and other qualified retirement accounts will be increasing slightly in 2020.  The new deferral limit for individuals under the age of 50 is $19,500, which is an increase of $500 from 2019.  The catch-up for individuals over age 50 will be $6,500 ($6,000 / 2019).  The total contribution limit (employee and employer …

Producer Price Index

The Producer Price Index (PPI) looks at the average change in selling prices from the viewpoint of domestic producers of both goods and services. Three areas of production are observed: industry-based, commodity-based and commodity-based final demand-intermediate demand. Investors look to the producer price index, which is a more relevant way of gauging inflation than CPI because of the large basket …

Change in Nonfarm Payrolls

Nonfarm payrolls give an overview of the overall employment outlook of the US economy; nonfarm payrolls do not include those employed in agriculture because of the seasonal nature of their work. This report obtains these numbers from 142,000 businesses and government agencies to track the new jobs added in non-farming sectors of the economy. In October, the unemployment rate is …

ISM Manufacturing Index

The ISM Manufacturing Index is derived from a survey of purchasing managers and their outlook on overall conditions by looking at factors such as orders for durable goods, industrial production and hiring. It gives a general direction rather than the specific strength of the factory sector and manufacturing activity in the U.S. A reading above 50 is an indicator that …