into monetary policy so directly, the CPI report can have a high impact on prices in the bond, FX, and stock markets. The reasoning behind that importance is directly related to their timing. Government is slow to release their official figures due to their desire to be accurate and probably a few bureaucratic reasons, but businesses tend to be a little more expedient. If retail sales are increasing, it is an indication of economic health, and it tends to have a bullish effect on the stock market. Industrial Production Index The Industrial Production Index measures the level of US output (in terms of quantity of material produced rather than Dollar amount) relative to a base year over three broad areas: manufacturing, mining, and gas and electric utilities. These are just a couple of the leading economic indicators you can use to help yourself get a leg up on the competition, and the more you watch them, the more comfortable you can become in utilizing their knowledge). The yellow vertical line marks the release of the Employment Situation report that was released on Notice how sharply the price moved in just one minute? The May 2017 level of 105.0 signifies, therefore, that production levels were 5 higher than the average level in the base period of 2007. This has to some degree been responsible for the extended bull-market we have seen in the. Politicians, policymakers, and economic analysts all focus heavily on this indicator, precisely because it is such a comprehensive measure. If the FED makes a change to the federal funds rate, or simply alters perceptions about the future course of monetary policy, it makes a difference to the US Dollar, the most important currency in the world.
Short-term changes in the labour market are much more likely to be reflected in the weekly initial jobless claims data, than in the monthly employment report. This makes it an important indicator for CFD traders to follow, particularly for bond traders, but it's also a key marker for those involved in the shares and FX markets. The one-minute EUR/USD chart below illustrates such a move.
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This is an expression of the current output relative to the base year. This, in turn, is likely to feed through to consumer prices, leading to higher inflation. We tend to see unemployment continuing to rise even after GDP has bottomed out. Manufacturing only makes up roughly 20 of the US economy, but is closely monitored by FX and CFD traders. Sometimes, the data is as direct as reporting monthly sales from a particular segment of the economy. It measures the value of services and goods in the economy. Accordingly, analysts often focus on retail sales, excluding auto sales in order to remove unpredictable variations, and to perceive underlying trends in the data more easily. Conversely, if capacity utilisation is running at low levels, it is a signifier of economic weakness. Maximum employment and stable prices are two of the FED's (Federal Reserve) Three Monetary Objectives (these two key goals are often referred to as the FED's dual mandate).