Table of Contents
Acknowledgments xiii
Introduction 1
The Business Cycle 3
Indicators and the Markets 6
How to Use This Book 7
Who Can Benefit from This Book? 9
Gross Domestic Product 11
Evolution of an Indicator 13
Digging for the Data 14
Some Definitions 16
GDP Versus GNP 17
Calculating GDP: The Aggregate-Expenditure Approach 18
Nominal and Real Numbers 22
Deflators 25
National Income 26
Employee Compensation 28
Other Income Categories 28
GNP, GDP, and National Income 30
What Does It All Mean? 32
GDP Growth 33
Deflators 35
Consumption Expenditures 36
Investment Spending 37
Government Spending 39
Net Exports 40
Final Sales 42
Corporate Profits 44
How to Use What You See 46
Tricks from the Trenches 47
Indexes of Leading, Lagging, and Coincident Indicators 51
Evolution of an Indicator 53
Digging for the Data 53
Coincident Index 54
Leading Index 55
Lagging Index 62
What Does It All Mean? 64
Coincident Index 65
Lagging Index 66
How to Use What You See 67
Tricks from the Trenches 68
The Employment Situation 69
Evolution of an Indicator 71
Digging for the Data 72
Household Survey (A Tables) 73
Establishment Survey (B Tables) 74
What Does It All Mean? 77
Employment, Unemployment, and the Business Cycle 77
Inflation Indicators 79
Sentiment and Unemployment 81
Average Hours Worked and Temporary Workers 82
How to Use What You See 84
Tricks from the Trenches 86
Industrial Production and Capacity Utilization 89
Evolution of an Indicator 90
Digging for the Data 91
Industrial Production 92
Capacity Utilization 94
What Does It All Mean? 95
Industrial Production 95
Capacity Utilization 100
How to Use What You See 104
Tricks from the Trenches 105
Institute for Supply Management Indexes 107
Evolution of an Indicator 108
Digging for the Data 109
What Does It All Mean? 114
Purchasing Managers' Index 115
ISM Employment Index 117
ISM Price Index 119
ISM Supplier Deliveries Index 122
ISM Nonmanufacturing Indexes 123
How to Use What You See 126
Tricks from the Trenches 126
Manufacturers' Shipments, Inventories, and Orders 131
Evolution of an Indicator 132
Digging for the Data 134
Durable Goods Report 134
Factory Orders Report 138
What Does It All Mean? 139
Durable Goods Report 139
Factory Orders Report 142
How to Use What You See 143
Tricks from the Trenches 144
Manufacturing and Trade Inventories and Sales 147
Evolution of an Indicator 149
Digging for the Data 149
What Does It All Mean? 151
Inventories and the Business Cycle 153
Inventories-to-Sales Ratios 154
How to Use What You See 155
Tricks from the Trenches 156
New Residential Construction 159
Evolution of an Indicator 160
Digging for the Data 161
What Does It All Mean? 163
Influences on Residential Construction 164
Regional Differences 167
Housing and the Business Cycle 168
Single-Family Housing Starts 169
How to Use What You See 171
Tricks from the Trenches 172
Conference Board Consumer Confidence and University of Michigan Consumer Sentiment Indexes 175
Evolution of an Indicator 177
Digging for the Data 177
What Does It All Mean? 179
The Expectation Indexes 182
Confidence and Durables Spending 184
How to Use What You See 185
Employment and Sentiment 186
Noneconomic Influences on Sentiment 186
Tricks from the Trenches 189
Advance Monthly Sales for Retail Trade and Food Services 193
Evolution of an Indicator 194
Digging for the Data 195
Surging Subcategories: Superstores and E-Commerce 198
What Does It All Mean? 200
Total Retail and Food Service Sales, Nominal and Real Figures 200
Total Sales Excluding Motor Vehicles and Parts 201
General Merchandise, Apparel, Furniture, and Other 202
How to Use What You See 203
Same-Store Sales 205
Seasonality 206
Tricks from the Trenches 206
Personal Income and Outlays 209
Evolution of an Indicator 210
Digging for the Data 211
Personal Income 214
Personal Consumption Expenditures 214
Personal Savings 216
What Does It All Mean? 216
Personal Income 217
Consumer Spending 220
Personal Savings Rate 221
How to Use What You See 223
Tricks from the Trenches 225
The Wealth Effect 225
Prices 227
Employment 228
Consumer and Producer Price Indexes 231
Evolution of an Indicator 233
Producer Price Index 233
Consumer Price Index 234
Digging for the Data 235
Consumer Price Index Data Sources 235
Producer Price Index Data Sources 238
Calculating the Inflation Rate 240
What Does It All Mean? 240
Price Trends 241
Price Indexes and the Markets 242
Price Indexes and the Business Cycle 243
How to Use What You See 244
Tricks from the Trenches 245
The Fixed-Income Market 249
Evolution of an Indicator 250
Digging for the Data 251
What Does It All Mean? 255
Inflation, Interest Rates, and Bond Prices 257
How to Use What You See 262
Yield Curves Over Time 263
The TIPS Spread 266
Tricks from the Trenches 268
Commodities 271
Evolution of an Indicator 273
Commodity Price Indexes 275
Digging for the Data 276
Energy 277
Agricultural Products 279
Mining 279
Journals and Associations 280
What Does It All Mean? 280
The Reuters/Jefferies CRB Index 281
The Goldman Sachs Commodity Index 282
The JOC-ECRI Industrial Price Index 282
The Need for Revision 284
How to Use What You See 288
Basic Material and Commodity Companies 289
The Agriculture Prices Summary Report 291
The Crude-Oil Market 291
Gold 293
Tricks from the Trenches 294
References 299
Index 315
Continuing Education Exam for CFP Continuing Education Credit 328
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