Global Market Directional Movement Indicators and Economic Indicators Involved in Forex Gold Trading Glossary

Economic indicators are policy decisions or national data reports, and every time an important economic indicator is released, it causes fluctuations in the international financial marekt. Understanding what economic indicators are, their impact, when they appear, and how they change can provide another very valuable market insight for Forex gold traders.

PPI - Producer Price Index; Core PPI(Ppi Producer Price Index Core Ppi)

Bureau of Labor Statistics; the second full week of each month, 8:30 a.m. ET, releases data for the previous month

The PPI is not as widely used as the CPI, but is still considered an important indicator of inflation. This indicator reflects changes in input costs (such as raw materials; work in progress, etc.) for producers. Formerly known as the "Wholesale Price Index", the PPI covers a range of indices in different areas that affect domestic production. About 100,000 prices are collected each month from 30,000 producing and manufacturing enterprises. Although the PPI is not as strong as the CPI in terms of monitoring inflation, it is generally possible to predict future CPI data because it contains goods being produced.

Philadelphia Fed Index(Philadelphia Fed Index)

Released by the Federal Reserve Bank of Philadelphia; around the 17th of each month, at 10:00 am EST, the data of the previous month is released

A monthly business outlook survey covering manufacturers in Pennsylvania, New Jersey and Delaware. Companies participating in the survey indicate the trend of changes in their overall business activity and various measures of production activity in their factories. An index higher than 0 indicates expansion; an index lower than 0 indicates contraction. The index is considered an important measure of changes in employment, prices and manufacturing conditions. Although it does not necessarily lead to significant market volatility, the results of the business outlook survey can predict the purchasing managers' index (usually released a few days later than the Philadelphia Fed index and covering the entire United States).

Initial jobless claims data(Initial Jobless Claims)

U.S. Department of Labor; last week's data is released every Thursday at 8:30 a.m. ET

The data, which counts first-time jobless claims, is of low to medium importance because the weekly data is more volatile and the four-week average more stable.

Industrial capacity; capacity utilization(Industrial Production Capacity Production Utilization)

Federal Reserve; in the middle of each month, at 9:15 a.m. ET, last month's data is released

It is a chain-weighted measure of changes in the production of factories, mines and utilities across the country, as well as their industrial capacity and the use of available resources (commonly known as capacity utilization). In addition, the capacity utilization index also forecasts how much factory capacity is actually operating. Since manufacturing accounts for a quarter of the economy, they are very important indicators

housing start-up rate(Housing Starts)

Census Bureau; around the middle of each month, at 8:30 a.m. ET, last month's data is released

This economic indicator tracks the number of new single-family homes or buildings built throughout the month. In the survey, each home and apartment is counted as a housing start. This indicator is not a major market influencer, but according to the U.S. Census Bureau, the housing sector accounts for more than 25% of investment funds and 5% of the overall economy. Housing starts are seen as the leading indicator, and it indicates future economic trends. A decline in housing starts indicates a slowdown, and an increase in housing construction indicates an economic recovery from a setback.

GDP price deflator(Gdp Price Deflator)

The Bureau of Economic Analysis (BEA) releases last quarter data at 8:30 a.m. EST on the last day of each quarter

The GDP deflator or GDP deflator shows the amount of change in GNP relative to the price level in the base year. Also known as the "absolute price deflator of GNP". Because it is not based on a fixed basket of goods and services, the GNP deflator has an advantage over the Consumer Price Index (CPI). Changes in consumption patterns or the introduction of new goods and services are automatically reflected in this deflator. This data is a moderately important market indicator.

Durable goods(Durable Goods)

Census Bureau; on the fourth week of each month, at 8:30 a.m. ET, last month's data is released

Durable goods orders, which count new orders for durable goods received by domestic manufacturers for immediate and future delivery by factories. Durable goods are goods with a long service life (more than three years). Increased durable goods orders are usually associated with strong economic activity, and therefore also lead to higher short-term interest rates, which often drive up short-term exchange rates.

Current Account(Current Account)

Bureau of Economic Analysis (BEA); released quarterly, approximately six weeks after the end of the first quarter

The difference between a country's total exports of goods, services and transfers of funds and its total imports. The calculation of the current account balance excludes transactions in financial assets and liabilities. Current account data indicate trends in the foreign trade economy and are therefore seen as significant market drivers.

Composite Index of Leading Economic Indicators(Composite Index Of Leading Indicators)

Conference Board; released around the 20th of each month at 10:00 AM EST

An index used to predict the direction of economic activity in the coming months. The index includes 10 economic components that generally move ahead of changes in the overall economy. The 10 economic components include:

1. The average weekly working hours of manufacturing workers.
2. The average number of people applying for unemployment insurance benefits for the first time.
3. The number of new consumer goods and materials orders from manufacturers.
4. The speed at which suppliers deliver new goods to sellers.
5. The number of new orders for non-defense capital goods;
6. The number of new construction permits for residential buildings;
7. Standard & Poor 500 stock index;
8. The inflation-adjusted money supply (M2).
9. The spread between long-term and short-term interest rates.
10. Consumer confidence index.

By observing the composite index of leading economic indicators in the context of the business cycle and general economic conditions, investors and companies can predict future trends and make more informed decisions. This indicator is moderately important because its constituent data is made public before its release.

Monthly government budget report(Budget Statement Monthly)

The monthly report of the US government (Treasury Department) shows a monthly budget deficit or surplus

The level of the deficit/surplus affects the amount of Treasury debt issued by the US government, and therefore its price. In addition, this report reflects the state of government tax revenue, and it is also a testament to the active level of the economy. In this sense, the April report (the annual tax filing month) is even more important than the budget report in other months.

PCE - Personal Consumption Expenditure(Pce Personal Consumption Expenditure)

The Bureau of Economic Analysis (BEA) releases data for the previous month at 8:30 a.m. EST on the last day of each month

The PCE index reflects changes in the prices of consumer goods and services. The PCE is a fairly predictive report and usually has little impact on the market. The core PCE index excludes food and energy prices, making it a more accurate predictor of inflation trends.

ECI - Employment Cost Index(Eci Employment Cost Index)

Bureau of Labor Statistics; last Thursday of April, July, November, and January, 8:30 a.m. ET, releases last quarter data

The ECI tracks changes in labor costs, including wages, fringe benefits, and bonuses for the various types of employees a company hires. The Bureau of Labor calculates this indicator by surveying more than 3,000 private enterprises and more than 500 local governments, schools, and other public institutions. Although the indicator itself is not the most popular, it is one of the selected indicators that can affect the market (especially in times of inflation). The significance of the ECI indicator is that when the pressure of rising wages increases, so does the pressure of inflation. This is mainly because after the salary increase, the company will raise the consumer price (inflation) to make up for the increase in labor costs.

Beige Book(Beige Book)

Federal Reserve Board; Wednesday two weeks before FOMC policy meeting, eight times a year, released at 2:15 p.m. ET

The Beige Book is often used to refer to the Federal Reserve's report, "Summary of the Current State of the Federal Reserve District Economy." It is released before the FOMC's interest rate meeting and is used to inform committee members of economic changes since the last meeting. The report is published eight times a year. The Beige Book is not an important market driver. It measures the strength of the economy rather than commenting on the views of Fed members. It can also influence market movements when its data conclusions far exceed analysts' expectations.

balance of trade(Trade Balance)

The U.S. Department of Commerce releases data for the previous month on the second week of each month at 8:30 a.m. ET

The largest component of a country's balance of payments. The trade balance reflects the difference between the total value of a country's exports of goods and services and the total value of its imports of goods and services. If imports exceed exports, the country has a trade deficit, and vice versa. It is a very important market driver.

TIC (Treasury International Capital Flows) data on long-term securities transactions(Tic Treasury International Capital Data On Transactions In Long Term Securities)

US Treasury; around the twelfth working day of each month, at 9:00 am EST, the data of the previous month is released

The TIC data reflect the most important way the US finances its persistent current-account deficit: by selling long-term securities or Treasury bonds to foreign investors. Remember that there are other ways to finance the deficit: by borrowing from foreign banks or by attracting net inflows of foreign direct investment. But because FDI outflows outweigh inflows, and bank borrowing flows are smaller, most of the financing the US needs comes from selling long-term securities abroad. The TIC data is a good indicator of a country's credibility in an international investment environment. It is an important market driver.

Japan Short View Report(Tankan Survey)

The Bank of Japan; released four times a year in April, July, October, and mid-December; at 10:50 PM GMT

The Bank of Japan's survey of Japanese business economics is used to set monetary policy. The survey covers thousands of Japanese companies that meet certain minimum capital standards, although certain companies with sufficient influence may also be included. The companies surveyed are asked to answer their views on the business environment and current trends and conditions in their industry, as well as their expectations for business activities in the next quarter and the year ahead. The report has an important impact on the yen exchange rate.

Retail sales data; excluding retail sales of automobiles(Retail Sales Data Retail Sales Less Automotives)

Census Bureau; last month's data is released around the 12th of each month at 8:30 a.m. ET

Retail sales are a key driver of the US economy. This indicator measures the goods sold by companies in the retail industry; it measures total consumer spending on retail (excluding service costs). Retail revenue is the main component of the US economy (accounting for two-thirds). The US Census Bureau surveys hundreds of companies and businesses of all sizes that offer retail transactions. The monthly data release shows the percentage change from the previous month's data. Negative values indicate a decrease in sales compared to the previous month. This indicator is a very important market driver because it is used to assess consumer behavior and confidence. Higher sales data means a more active economy. The data is extremely time-sensitive because last month's retail sales data will be released within two weeks.

PMI - Purchasing Managers Index(Pmi Purchasing Managers Index)

Institute for Supply Management; on the first business day of each month, at 10:00 am EST, last month's data is released

The PMI is a composite index that includes five main indicators: new orders, inventory levels, production, supplier deliveries, and employment. Each indicator is weighted differently and the data is seasonally adjusted. The Purchasing Managers Association surveys more than 300 purchasing managers in 20 different industries in the United States. A PMI index above 50 indicates that manufacturing is expanding, while a PMI index below 50 indicates that the industry is contracting. The PMI report is an extremely important indicator for financial marekt because it is the best indicator of factory production conditions. The indicator is widely used to monitor inflationary pressures and the state of the manufacturing economy. Although the PMI is not as powerful as the CPI in monitoring inflation, it is very timely because the data for the current month is released on the first day of the following month. Markets usually react quickly when PMI reports reflect unexpected changes, and a particularly crucial indicator is the growth in new orders, which forecast the state of manufacturing in the months ahead.

NFP - Change in Nonfarm Employment(Nfp Changes In Non Farm Payrolls)

The Department of Labor releases last month's data on the first Friday of each month at 8:30 a.m. ET

The data is designed to show changes in the total number of wage earners in the United States across all industries, but excludes the following groups:

- government employees;
- private domestic employees;
- employees of non-profit organizations who provide assistance to individuals;
Employment in agriculture.

About 80% of the workers who generate US GDP are included in total nonfarm payrolls. Nonfarm payrolls are also used by government policymakers and economists to determine current economic conditions and predict future levels of economic activity. Because market predictions of this data often vary widely from reality, it has a significant impact on market volatility.

MCSI - Michigan Consumer Confidence Index(Mcsi Michigan Consumer Confidence Index)

University of Michigan; on the first day of each month, last month's data is released

The University of Michigan's Consumer Confidence Survey. The index is increasingly useful to investors. It roughly reflects whether consumers are willing to spend money.

ISM (Institute for Supply Management) Manufacturing Index(Ism Institute For Supply Management Manufacturing Index)

Institute for Supply Management; on the first business day of each month, at 10:00 am EST, last month's data is released

The Manufacturing ISM Economic Report is based on monthly feedback aggregates from purchasing staff at more than 400 industrial companies. It reflects the combined average of five major economic indicators (new customer orders 30%; production 25%; employment 20%; supply orders 15%; inventories 15%). Data above 50 indicates economic expansion, while below 50 indicates contraction.

GDP - Gross Domestic Product(Gdp Gross Domestic Product)

The Bureau of Economic Analysis (BEA) releases last quarter data at 8:30 a.m. EST on the last day of each quarter

The U.S. Department of Commerce publishes GDP in three ways: preliminary; revised; and final. GDP is the total amount of market activity. It represents the monetary value of all goods and services produced in an economy during a given period. This includes consumption, government purchases, investment, and the trade balance. GDP is perhaps the best indicator of a country's economic health. It is usually calculated on a one-year basis, but quarterly statistics are also published.

The Ministry of Commerce publishes the "preliminary value" on the last day of each quarter, the "revised value" within a month, and the "final value" after a month. The latest GDP data is more important to the market. GDP reflects the speed at which a country's economy is growing (or declining).

The FOMC meeting (FOMC)(Fomc Meeting Federal Open Market Committee)

The Federal Reserve bank representative meeting is held 8 times a year. Each meeting issues a base rate resolution (about 14:15 EST).

The Federal Reserve (FED) is responsible for setting US monetary policy, supervising banks, providing services to government entities and citizens, and maintaining the country's financial stability. The US has 12 Federal Reserve Districts (each consisting of several states), which are represented on the Federal Reserve Board by their regional commissioners. The interest rate of money is actually the price of the currency. The higher the interest rate of the currency, the more people tend to hold and buy the currency, thus strengthening the value of the currency. This is a very important indicator, which affects the inflation rate and is a big market driver. The meeting notes issued by the FOMC are very important, and the content considered at the meeting (released two weeks after the meeting) is equally important to market investors.

Employment status report(Employment Situation Report)

Bureau of Labor Statistics; first Friday of the month, 8:30 EST (last month's data released)

The survey covers more than 250 regions and almost all major industries in the United States. This report is closely followed by financial marekt and has an important impact on the market. It includes unemployment and new jobs and shows the unemployment rate and changes in the unemployment rate. At the same time the report discloses the average hours worked per week and the average hourly earnings, thus reflecting the state of the labor market and determining inflation. Traders value this report because the data for the month is released in a week and is very time-sensitive.

Employment report(Employment Report)

Department of Labor; first Friday of each month, 8:30 EST (release of previous month's data)

The survey covers 375,000 businesses and 60,000 households. The indicators cover new and eliminated jobs, average wages, and average hours worked per week. The report reflects the economic performance of different industry sectors, including mining, utilities, manufacturing, services, and more. This is a very important data release, revealing the latest information. Combined with the non-farm payrolls report, they provide a good reflection of the health of the US economy.

CPI - Consumer Price Index; Core CPI Index(Cpi Consumer Price Index Core Cpi)

Bureau of Labor Statistics; around the 20th of each month, 8:30 EST (release last month's data)

This is the most widely used measure of inflation and is seen as an indicator of the efficiency of government policy. It measures the prices of a basket of consumer goods and services every month, excluding taxes. It has a big impact on markets; a rise in the CPI marks inflation. The core CPI excludes food or energy because they are more affected by seasonal changes and give more weight to general prices.

CCI - Consumer Confidence Index(Cci Consumer Confidence Index)

Conference Board; the last Tuesday of each month at 10:00 EST (monthly data release)

The survey is based on a sample of 5,000 US households and measures consumer confidence in terms of wages, interest rates and overall spending power. The Federal Reserve sets interest rates on this metric, which is also the main driver of the market.