Understanding the Pulse: Key Indicators in Economic Reports

GDP: Real growth, deflators, and meaningful momentum

GDP comes in advance, second, and third estimates, and the real number uses deflators to strip out inflation. Watch nominal versus real growth, and track contributions by consumption, investment, government, and trade. Tell us how you interpret a strong consumer offsetting weak inventories.

Inflation: CPI versus PCE, base effects, and shelter lag

Headline and core tell different stories; PCE better reflects substitution while CPI highlights household pressure. Base effects can exaggerate year-over-year moves, and shelter often lags reality. Have you noticed prices cooling in your neighborhood even while reported shelter stays sticky?

Unemployment: U-3, U-6, participation, and claims

The unemployment rate can fall when people stop looking for work, so pair it with participation and underemployment. Weekly jobless claims give faster signals than monthly reports. A plant manager once told us the second shift reopened months before U-3 finally turned down.

Inflation Signals: From CPI Details to Market Expectations

Core inflation smooths volatile food and energy, while trimmed-mean and median metrics cut outliers differently. Owners’ equivalent rent can dominate the index even when market rents cool. Share whether you prefer core CPI, PCE, or trimmed-mean measures when judging sticky price pressure.

Inflation Signals: From CPI Details to Market Expectations

Producer prices and import costs hint at pipeline pressures. Pass-through is uneven and depends on competition and contracts. A local furniture shop told us rising freight costs squeezed margins for months before sticker prices changed. Do you see similar lags in your industry?

Inflation Signals: From CPI Details to Market Expectations

TIPS breakevens reveal market-based inflation expectations but can be distorted by liquidity and risk premia. Compare 2-year and 5-year horizons with survey measures. When breakevens diverge from core trends, do you fade the market or reconsider your inflation outlook?

Payrolls, revisions, and diffusion

Monthly payrolls grab headlines, but revisions often rewrite the story. The diffusion index shows how broad job gains really are. We remember a month where a modest gain turned robust after revisions, reshaping sentiment. Do you wait for the second print before reacting?

JOLTS: Openings, quits, and the balance of power

Openings-to-unemployed ratios and quits rates speak to worker confidence and hiring difficulty. High quits can foreshadow wage pressure and faster job switching. A café owner shared that baristas stopped bargaining when quits fell sharply. How do you translate that into wage forecasts?

Wage growth: AHE versus ECI and composition effects

Average hourly earnings can mislead when lower-wage hiring surges or retreats; the Employment Cost Index adjusts for composition and benefits. Pair both to reduce noise. If your company has shifted to remote hires, have wage bands changed your interpretation of raises?

Real-Time Growth Clues: PMIs, Retail, and Housing

Manufacturing and services PMIs move quickly with business sentiment. New orders lead production, prices paid flag cost pressure, and backlogs reveal bottlenecks. Watch diffusion around 50 for expansion or contraction. Which PMI subindex most reliably predicts your sector’s next quarter?

Real-Time Growth Clues: PMIs, Retail, and Housing

Headline retail sales can be noisy; the control group better tracks personal consumption in GDP. Deflate by relevant price indexes to see real demand. Seasonal quirks around holidays can mislead. Do you keep a personal tracker for discretionary versus essentials to spot shifts?

Financial Conditions and the Yield Curve

The 2s10s curve can invert long before slowdowns arrive, so treat it as warning, not timing tool. Term premiums and policy expectations matter. In 2006, an inversion flashed early while growth limped along. How do you pair curve signals with coincident data?

Financial Conditions and the Yield Curve

High-yield and investment-grade spreads widen when financing tightens, often aligning with bank lending standard surveys. Spreads embed default risk, liquidity, and fear. A treasurer once paused a bond deal after spreads jumped. What spread level forces you to rethink capital plans?

Build Your Own Indicator Dashboard

Pick a balanced set: growth, inflation, jobs, housing, and financial conditions. Note release calendars and lead-lag behavior. Keep a simple color code for trends and momentum. What two indicators do you elevate to top row status when volatility spikes?

Build Your Own Indicator Dashboard

Economic data gets revised, and seasonal adjustment can distort turning points. Read footnotes for methodology changes, sample shifts, and one-off effects. Keep a log of initial prints versus final values. Which revision surprised you most, and how did it change your decision?