Introduction 1
About This Book 1
Conventions Used in This Book 2
Foolish Assumptions 3
What Not to Read 4
How the Book Is Organized 4
Part I: Figuring Out the Economy 4
Part II: Making Money, Spending Money: Employment and Consumer Indicators 4
Part III: The Essence of Business: Product and Service Indicators 5
Part IV: Inflation, Productivity, Interest Rates, and Commodities: Oh My! 5
Part V: International Intrigue: Indicators beyond the United States 5
Part VI: The Part of Tens 6
Icons Used in This Book 6
Where to Go from Here 6
Part I: Figuring Out the Economy 7
Chapter 1: Introducing Economic Indicators 9
Understanding What Economic Indicators Are 10
Reading the economy through economic indicators 10
Cycling through economic ups and downs 11
Identifying What Indicators Indicate 12
Tracking consumer spending 12
Looking at the big picture 13
Eyeing manufacturing 14
Counting up the number of bought, sold, and newly built homes 15
Monitoring inflation 15
Measuring productivity 16
Looking at loans and commodity purchases 16
Following worldwide economies 17
Knowing How to Start Following Economic Indicators 18
Analyzing the data 19
Tracking economic indicator release dates 19
Chapter 2: Explaining Economic Jargon 21
Identifying Types of Economic Indicators 21
Summarizing economic results 22
Surveying for information 22
Indexing the economy 24
Understanding How Economists Analyze the Data 27
Measuring growth 27
Annualizing reported data 29
Smoothing data with moving averages 32
Massaging Economic Data to Make the Results More Useful 35
Adjusting for inflation 35
Adjusting for seasonal fluctuations 37
Considering the Timeliness of Economic Indicators 37
Leading indicators make forecasts 38
Coincident indicators are no coincidence 38
Lagging indicators can't foretell the future 39
Looking into the Future with Consensus Forecasts 39
Finding consensus forecasts 40
Analyzing the accuracy of the consensus 40
Amending and Modifying Data with Revision Reports 41
Revising previous reports 41
Changing benchmarks 42
Cha-Ching: Money, Interest Rates, and the Economy 43
Understanding the Fed's monetary measures 43
Setting short- and long-term interest rates 44
Chapter 3: Understanding the Big Picture: The Economy and Its Footprints 45
Taking a Closer Look at the Business Cycle 46
Identifying the phases of the cycle 46
Growing into expansion 49
Slowing into recession 49
Reviewing the Key Financial Markets 50
Investing in stocks 50
Holding bonds 53
Trading commodities 55
Tracking currencies 56
Figuring Out What's What in Economic Reports 57
Finding what's important in each report 58
Seeing how reports are assembled 59
Showing Economic Fashions without the Runway 59
Understanding market sensitivity 60
Determining an indicator's accuracy and timeliness 61
Seeing who's interested in what 61
Part II: Making Money, Spending Money: Employment and Consumer Indicators 65
Chapter 4: Counting Jobs and Unemployment 67
Tracking the BLS Employment Situation Report 68
Counting workers and the unemployed 68
Highlighting key parts of the jobs report 73
Deciphering employment numbers 75
Predicting market reactions due to employment changes 77
Looking at Unemployment Insurance Claims 79
Keeping track of unemployment insurance claims 80
Smoothing jobless claim fluctuations 81
Analyzing the claims numbers 82
Determining how the market