Chicago PMI

Chicago PMI is a composite index of business conditions in the Chicago area. Data from Chicagoland firms is collected by the financial news firm, Market News International, through manufacturing and non-manufacturing surveys sent to businesses. A drop in demand for goods is reflected in businesses’ responses in the Chicago PMI survey, which, is in turn, reflected in a lower index …

Personal Consumption 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 …

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 …

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 …

Job Openings and Labor Turnover Survey

The JOLTs report is the Job Openings and Labor Turnover Survey 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 February to March have decreased 11.61% from 7.0 million to 6.19 million in total. …

U.S. Initial Jobless Claims

US Initial Jobless Claims, provided by the US Department of Labor, provides underlying data on how many new people have filed for unemployment benefits in the previous week. Given this, one can gauge market conditions in the US economy concerning employment; as more new individuals file for unemployment benefits, fewer individuals in the economy have jobs. Historically, initial jobless claims …

Consumer Spending and Personal Income

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 non-durable goods, or …

Making Lemonade out of Three COVID Lemons

In light of recent concerns over the economy, we are all worried about the performance of our investment portfolios. The latest pandemic has spiraled the market into a decline that is proving to be unpredictable. With this has come a lot of uncertainty and a few sour lemons. However, there are actions you can take that will help sweeten things …

U.S. Building Permits

US Building Permits, as defined by the Census Bureau, is the approval or authorization by the government to legally work on construction projects in permit-issuing places, in this case, specifically for new privately-owned housing units. An increase in building permits is a leading indicator of the health of the US Housing sector, and often the US economy at large. US …

Housing Starts

Housing starts track the number of new residential construction projects over a month. This indicator has implications for demand in construction spending/jobs, consumer wages, and complementary sectors such as durable household item sales. Along with building permits, housing starts is considered a leading economic indicator. Housing starts fell by -22.25% in March 2020 to an annualized rate of 1.22 million, …

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. Food was excluded in the Retail Sales TTM chart above because of …

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 …

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%, …

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 …

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 …