Home > Fundamental analysis > Economic indicators > Economic indicators - A
Economic indicators - A
List of indicators - A:
- ABC/Money Magazine Consumer Comfort Index
- Aggregate Hours Worked
- Atlanta Fed index
- Average hourly earnings
- Average Weekly Earnings
- Average workweek
ABC/Money Magazine Consumer Comfort Index
ABC/Money Magazine Consumer Comfort Index is a nationwide enquiry of about 1,000 adults per month about personal finances, buying climate and the status of the economy. It is supposed to be helpful and more frequent measure of consumer opinions.
The aggregate hours worked totalizes two series we just mentioned. The idea is to get an entire picture of the total hours worked each month by calculating an index that represents both employment and the workweek. This indicator is considered to reflect monthly changes of GDP. The quarterly change in the amount for goods produced is defined as equal to the change in man-hours plus the change in productivity.
As far as we can predict productivity from quarter to quarter, the aggregate hours worked index provides a useful monthly read on the entire economy. The Atlanta Fed Index' official name of this index is Southeastern Manufacturing Survey, which is a regional manufacturing review that covers such prominent industrial states as Alabama, Georgia, Louisiana, Tennessee, and Florida. The survey's industry business conditions index is designed to represent changes in the factory-sector. It is above zero when the sector expands and below zero when the sector contracts.
Actually, this index has no market importance and is available after the releasing of the national Purchasing Managers' Index. So this index considered too dated not worth tracking. Average Hourly Earnings One of the most important indicators of the tightness of labor markets and labor cost inflation is Average hourly earnings (AHE). The Bureau of Labor Statistics of the U.S. Department of Labor provides it every month, one week after the reported month. The indicator seems to take insignificant effect financial markets; unexpected increases can cause rising of interest rates because such increasing considered inflationary, especially if in excess of productivity growth. A large rate of growth of AHE can cause increasing of Fed Funds rate that is also bearish for the bond market. Stock prices, in regards to high wage growth, may increase long-term interest rates, reduce profits, and lead to the increase of the Fed Funds rate to stem inflation. That is why higher wage inflation is bearish for the stock market. Exchange rates are unclear. On one hand, it leads to higher nominal interest rates and real ones too. On the other hand high wage inflation leads to high inflation and loss of competitiveness. Ability to Affect Markets: it is an early signal of wage inflation.
Analysis of the Indicator: if the wage growth were above productivity growth, high rates of growth of average hourly earnings would lead to higher inflation. Employment Cost Index (ECI), closely watched by the Fed, is a measure of wage cost growth. Compared to the quarterly published ECI, the advantage of the average hourly earnings indicator is that it is published monthly and is an early indicator of wage growth in the previous month. However, compared to the ECI, AHE has some minuses. The ECI includes wages and salaries as well as benefits costs, so it is a broader measure of labor costs. In general, the basis of AHE indicator is gross earnings. Therefore, they represent changes in basic hourly and incentive wage rates as well as premium pay for overtime, late-shift work and changes in output of workers paid using an incentive based plan. They also demonstrate shifts in the number of employees between relatively high-paid and low-paid work. Changes in earnings for the individual industries making up those groups and divisions will have an impact on averages for industry groups and divisions. Average hourly earnings reported by CES are not wage rates.
Average Weekly Earnings
Average Weekly Earnings are the result of multiplying the average weekly hours estimated by average hourly earnings estimates derives these estimates. So, weekly earnings are affected the length of the workweek along with changes in average hourly earnings. Monthly trends in these factors as stoppages for varying reason, the proportion of part-time workers, labor turnover during the survey period and absenteeism for which employees are not paid may cause the fluctuations of average workweek. Structural changes in the makeup of the workforce can cause long-term trends of average weekly earnings. For example, persistent long-term rising of the percentage of part-time workers in retail trade and many of the services industries have reduced average workweeks in these industries and have affected the average weekly earnings series.
The average workweek, or worked hours is necessary for two reasons. First, it is a useful indicator of labor market conditions. A rising workweek early in the business cycle may be the first indication that employers are preparing to increase their payrolls. On the other hand, late in the cycle, a rising workweek may indicate that employers are having difficult times finding specialists to occupy vacant positions. Second, it is a critical determinant of such monthly indicators as industrial production and personal income.