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Fundamental Analysis of Economic Reports & Their Impact

Updated: Jan 13

fundamental analysis of economic reports
The Federal Reserve building and the head chair, Jerome Powell.

Below is a comprehensive list of major economic reports released by the U.S. federal government throughout the year. These reports are crucial for investors, economists, and traders (like those in Foreign Exchange markets) as they provide insights into the health of the U.S. economy. They are typically scheduled at regular intervals, such as monthly, quarterly, or annually.


We can use these economic reports to help determine a fair market value for an exchange rate between two country's currencies.


Monthly Economic Reports


  1. Employment Situation Report (Non-farm Payrolls)

    • Agency: Bureau of Labor Statistics (BLS)

    • Frequency: Monthly (1st Friday of each month)

    • Details: Unemployment rate, job creation, labor force participation, and wage growth.

    • Impact: Strong job growth and wage increases typically strengthen the USD because they signal a robust economy and may lead to tighter monetary policy. Conversely, weak job numbers can weaken the USD.

  2. Consumer Price Index (CPI)

    • Agency: Bureau of Labor Statistics (BLS)

    • Frequency: Monthly

    • Details: Measures inflation by tracking changes in the price of a basket of goods and services.

    • Impact: Higher-than-expected inflation usually strengthens the USD, as it increases the likelihood of interest rate hikes by the Federal Reserve. Lower inflation weakens the USD.

  3. Producer Price Index (PPI)

    • Agency: Bureau of Labor Statistics (BLS)

    • Frequency: Monthly

    • Details: Tracks changes in the prices producers receive for their goods and services (wholesale inflation).

    • Impact: Rising producer prices suggest future inflation, which may strengthen the USD if it prompts the Fed to act. Weak PPI readings can have the opposite effect.

  4. Retail Sales Report

    • Agency: Census Bureau

    • Frequency: Monthly

    • Details: Tracks consumer spending trends by measuring sales at retail stores, online retailers, and other establishments.

    • Impact: Strong retail sales indicate healthy consumer spending, boosting the USD. Weak sales suggest economic slowing, which can pressure the USD.

  5. Durable Goods Orders

    • Agency: Census Bureau

    • Frequency: Monthly

    • Details: Measures new orders for manufactured goods expected to last three years or more.

    • Impact: Increases in durable goods orders reflect business confidence and investment, supporting the USD. Declines signal potential economic weakness and can weaken the USD.

  6. Industrial Production and Capacity Utilization

    • Agency: Federal Reserve

    • Frequency: Monthly

    • Details: Tracks changes in the production of factories, mines, and utilities.

    • Impact: Growth in industrial output signals economic strength, which supports the USD. Declining production may weaken the USD, especially if it suggests a broader slowdown.

  7. New Residential Construction (Housing Starts and Building Permits)

    • Agency: Census Bureau

    • Frequency: Monthly

    • Details: Provides data on housing starts, building permits, and housing completions.

    • Impact: Rising housing starts and permits signal economic confidence and support the USD. Weak housing data can suggest economic cooling, pressuring the USD.

  8. Personal Income and Outlays (Including PCE Inflation)

    • Agency: Bureau of Economic Analysis (BEA)

    • Frequency: Monthly

    • Details: Measures changes in personal income, consumer spending, and inflation (via the PCE Price Index).

    • Impact: Rising personal income and spending support the USD, as they reflect economic strength. The PCE Price Index is a preferred inflation gauge for the Fed; higher PCE inflation can boost the USD.

  9. Trade Balance (International Trade in Goods and Services)

    • Agency: Census Bureau and Bureau of Economic Analysis (BEA)

    • Frequency: Monthly

    • Details: Tracks the difference between exports and imports.

    • Impact: A growing trade deficit can weaken the USD, as more dollars flow out of the U.S. A smaller deficit or surplus can support the USD.

  10. Job Openings and Labor Turnover Survey (JOLTS)

    • Agency: Bureau of Labor Statistics (BLS)

    • Frequency: Monthly

    • Details: Tracks job openings, hires, and separations to assess labor market conditions.

    • Impact: High job openings reflect labor market strength, supporting the USD. Weak readings may signal economic cooling and pressure the USD.

  11. Existing Home Sales

    • Agency: National Association of Realtors (NAR) [private, but widely used]

    • Frequency: Monthly

    • Details: Tracks the number of previously owned homes sold during the month.

    • Impact: Rising home sales indicate economic health, which can strengthen the USD. Declines in sales can weaken the USD if they reflect economic concerns.

  12. New Home Sales

    • Agency: Census Bureau

    • Frequency: Monthly

    • Details: Tracks sales of newly built homes.

    • Impact: Similar to existing home sales, strong data supports the USD, while weak data can signal slowing economic activity and weigh on the currency.



Quarterly Economic Reports


  1. Gross Domestic Product (GDP)

    • Agency: Bureau of Economic Analysis (BEA)

    • Frequency: Quarterly (Advance, Preliminary, Final estimates)

    • Details: Measures overall economic activity and growth.

    • Impact: Strong GDP growth supports the USD, as it reflects a robust economy and potential for tighter monetary policy. Weak GDP growth weighs on the USD.

  2. Employment Cost Index (ECI)

    • Agency: Bureau of Labor Statistics (BLS)

    • Frequency: Quarterly

    • Details: Measures the cost of labor, including wages and benefits.

    • Impact: Rising labor costs suggest potential inflation, supporting the USD due to possible Fed action. Weak ECI readings can pressure the USD.

  3. Productivity and Costs

    • Agency: Bureau of Labor Statistics (BLS)

    • Frequency: Quarterly

    • Details: Tracks productivity growth and labor costs in the economy.

    • Impact: Increases in productivity support economic growth and can strengthen the USD. Rising costs without productivity gains may weaken the USD.



Annual and Periodic Reports


  1. Economic Report of the President

    • Agency: Council of Economic Advisers (CEA)

    • Frequency: Annually

    • Details: Provides an overview of the U.S. economy and the administration's economic priorities.

    • Impact: Broad policy priorities can influence USD sentiment, especially if the report emphasizes fiscal discipline or spending.

  2. Budget of the U.S. Government

    • Agency: Office of Management and Budget (OMB)

    • Frequency: Annually

    • Details: Outlines federal government spending, revenue, and fiscal policy.

    • Impact: Large deficits or unbalanced budgets may weaken the USD, while disciplined budgets or surplus projections can support it.

  3. Survey of Consumer Finances

    • Agency: Federal Reserve

    • Frequency: Every three years

    • Details: Provides data on the financial conditions of U.S. households.

    • Impact: Insights into household finances can affect market sentiment about consumer spending, indirectly influencing the USD.



Other Key Economic Indicators


  1. Beige Book

    • Agency: Federal Reserve

    • Frequency: Eight times per year

    • Details: Provides qualitative reports on economic conditions from each Federal Reserve district.

    • Impact: Regional economic conditions provide clues about the Fed’s monetary policy direction. Positive sentiment supports the USD, while negative sentiment can weigh on it.

  2. Federal Reserve Policy Announcements (FOMC Meetings)

    • Agency: Federal Reserve

    • Frequency: Eight times per year

    • Details: Includes the federal funds rate decision and economic projections.

    • Impact: Hawkish (tightening) policies strengthen the USD. Dovish (easing) policies weaken it.

  3. Weekly Jobless Claims

    • Agency: Department of Labor

    • Frequency: Weekly (Every Thursday)

    • Details: Tracks initial and continuing claims for unemployment benefits.

    • Impact: Falling claims indicate labor market strength, supporting the USD. Rising claims can weaken the currency.

  4. Consumer Confidence Index

    • Agency: Conference Board (private but widely used)

    • Frequency: Monthly

    • Details: Measures consumer optimism about the economy.

    • Impact: Higher confidence supports consumer spending and strengthens the USD. Weak confidence pressures the USD.

  5. ISM Manufacturing and Services PMI

    • Agency: Institute for Supply Management (ISM) [private but influential]

    • Frequency: Monthly

    • Details: Tracks the health of the manufacturing and services sectors.

    • Impact: Strong PMI readings indicate economic expansion and support the USD. Weak PMI data suggests contraction, weakening the USD.



Where to Access These Reports




How does SGLP use these reports?


At SGLP, we have developed a sophisticated research dashboard that automatically gathers economic data released from the U.S. Federal Reserve along with economic data from other major economies. This tool enables us build a fundamental analysis and form a well-informed bias on each country's economic condition. Resulting in a direction bias for an exchange rate between any two major economies.


As a private hedge fund, SGLP specializes in investing in the Foreign Exchange market, leveraging advanced automation tools to enhance efficiency and precision.




 
 
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