Wednesday, April 8, 2009

Crack Wallstreet Unfolding Economic Indicators

By Josh Blackmiller

Up-to-the-minute news from the financial market is essential to wise investment decisions. To get this timely information, the IBD and WSJ are key. You gain an edge when ascertaining reliable metrics along with spot-on insights about market forces and economic trends.

Dominant economic indicators change before the economy changes. These indicators are gross domestic product (GDP) reports, consumer price index (CPI) reports, the producer price index (PPI), employment indicators, retail sales index, the national association of purchasing management index (NAPM), the consumer confidence index, durable goods order, employment cost index (ECI) and the productivity report which measures how much output is created by a unit of labor.

How these two things can affect your personal finances and investments is a case of systematic review and immediately taking action. Consumer confidence is one of the best indicators of the direction of the economy published in the Wall Street Journal and other leading financial papers. It is the first sign of an economic downturn or upswing.

Consumer confidence numbers are part of a particular set of statistics that are known as ''leading indicators''. They can reveal economic trends several weeks before harder objective data makes it apparent.

Consumer confidence numbers are arrived at through interviews with a random sample of consumers. These random selections are geared as a relative representative of attitudes and population structure of the country as a whole. Data point answers are weighted according to different income groups, occupations, and regions.

Many believe that a high consumer confidence is crucial to economic growth. These figures are released on the last Tuesday of the month at 10 am EST. This report measures how confident consumers feel about the state of the economy and their spending spark, or lack thereof.

Although a bit more futuristic, the stock market is normally a leading indicator of market direction. Historically, it has always led the real economy by about six months.

Thus, even in a tough economy, there can be what is called ''fake out's'' or ''dead cat bounces'' prior to a downward plunge in the market. On the other hand, in an improving market, there can be a sudden dive that leaves a lot of investors puzzled. Other people who invested and were defeated will leave a down market that will be opportunistic for others who can step in and take advantage of the situation. Get a Wall Street Journal subscription and read about Consumer Price Index national and international breakouts. - 23210

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