Major Economic Reports Create
Futures Trading Opportunities


Do you know the major economic reports, what they're about?

Successful futures traders learn everything they can about their markets, and what moves them. Learning about the major economic news releases and what they cover/measure, may not sound too exciting.

But it will help your understanding of futures trading and
making money at it.

In this page you'll find information on:

- Economic News from Economic Reports
- Economic News Reports Defined
- Economic Calendars
- Major Report Profiles



Economic News
from Major Economic Reports

On this page you'll find a listing of the major economic reports and economic news released every month (with the exception of the Gross Domestic Product report, formerly known as the Gross National Product).

These key economic reports will be listed in descending order of most important on down, based (in general) with regard to how the financial markets tend to view their importance, and how the news from these economic reports may trigger futures market price action / trading opportunities (and can also do so in the Stock, Index and Options markets).

In the financial futures markets...(Bonds, T-Bills, Currencies, etc., and the FOREX market) - economic reports/announcements from foreign countries markets/governments and the Federal Reserve...may and can affect these markets to a higher degree, than other futures.

By no means do you need to be an expert and know all about the various important economic news that comes out of these reports, memorizing index numbers and all that.

The overall purpose of this section is to give you:- More detailed information on economic news reports, including news release dates/times
and the availability of economic calendars.


Economic News Reports Defined

There are a number of varied reports and announcements that are released weekly and quarterly by the U.S. and other countries. These "Economic Reports", report on various data that reflects on the United States economic health, or status.

These economic reports all report on a specific segment of data(unemployment claims, interest rates, consumer confidence, etc.) that reflect some aspect of the United States economic health.

You've probably heard or recognize some of the more notable reports, reading about them in the newspaper, or watching the nightly news...the Consumer Price Index, Unemployment report, Construction Spending/New Housing Starts, Trade Deficit reportsand Federal Reserve announcements.

(Foreign countries have their own versions of our reports, which reflect similar economic health picture of their respective countries).

Consistent reports over time (weeks, months or quarters, depending on when reports are released) tend to point towards an economic trend.

Consistently positive news tends to reflect an upturn in the economy (ex:less unemployment = more jobs = more productivity = more spending).

Whereas consistently less positive news reported by one or more economic reports tends to point toward an uncertain economy or an economic downturn (ex:higher mortgage rates = lower housing starts = less construction spending = less productivity= less personal spending = potential recession).


Economic Calendars

Where does you find information on economic news and dates when certain news will break? On economic calendars of course.

With the sheer number of websites devoted to financial trading, commodity trading, futures trading, FOREX trading, etc., etc., there's quite a wide variety of choices at your disposal.

However, not all sites and economic calendars are equal.

For example, some sites may be vertically focused to agricultural or grain commodities. As such, and with a highly targeted visitor base interested only in "ag" futures, it's unlikely their economic news calendar will include news releases unrelated to or having no impact on their market.

Assuming you will be trading across multiple commodities and desire access to all the major economic news reports, you'll be better served by accessing a broad financial news site such as www.marketwatch.com, www.reuters.com or www.bloomberg.com, etc. Many broker sites also offer economic calendars.

These types of sites...or good futures trading specific sites....will provide you access to a broad-based economic calendar with many more of the regular monthly economic news releases...including a number of available reports not mentioned on this page...as we're focusing only on the major ones.

Most economic calendars will give you the economic reports scheduled for the current week, some others showing you the entire month's economic news to come in advance.

Other sites allow you to view economic reports by daily releases, helping you keep a tight focus on by providing you only the economic news calendar data you need today/tomorrow.


Economic News - The Major Reports

OK, let's have a more detailed look at the more important economic news reports that can be of value in presenting futures trading opportunities from time to time.

Many of these economic reports come out at 8:30AM EST, and most are released monthly. You'll see the name of the report/release, time it's released, date of release and the source of it's data.

NON-FARM PAYROLL
(aka: The Employment Report)

Release Importance - ("A")
Release Time - 8:30 AM EST
Release Date - 1ST Friday of each month (data for prior month)

Source - Bureau of Labor Statistics, U.S. Dept. of Labor

This economic report is regarded as the most important release of the month, providing a timely and very broad picture...provided by payrolls figures...of U.S. economy and economic activity.

It comprises two reports derived from two surveys - the Household and the Establishment surveys - measuring employment levels but from different perspectives. (The markets focus on the more comprehensive Establishment survey).

The economic news in this report includes the Unemployment Rate, which is pulled from the Household survey of ~60,000 households.

The second part of the Employment Report economic news comes from an "Establishment" survey of 375,000 businesses. It provides data on non-farm payrolls, average workweek and average hourly earnings figures, among other info.

Why is this information so important to economic trends - and trading opportunities?

Potential positive or negative economic trends can be discovered through viewing what is happening with the payrolls, overtime, and average hours worked, in various non-agricultural market segments (services, construction, manufacturing, etc.).

For example, looking at the info the average work week which this report's economic news supplies, can point to trends in industrial production, and indicate labor market conditions (Ex: rising workweeks may point to employers getting ready to boost payrolls, particularly if early in the business cycle.)

It is these sorts of economic news data points and the upward or downward economic trends they may indicate, that can move markets, creating price action and moves in commodity/futures markets, and affording alert traders the potential for capturing trading profits.


ECONOMIC NEWS - THE ISM INDEX REPORT
Institute for Supply Management Monthly Report on Business(formerly NAPM, Natl Assn of Purchasing Managers) Institute for Supply Management

Release Importance - (A-)
Release Time - 10:00 AM EST
Release Date - 1ST business day of each month (data for prior month)

Source - Institute for Supply Management

The ISM Index economic news report - is one of the more reliable leading business cycle indicators, highly anticipated by the private sector upon release each month.

Even though the U.S. manufacturing base has continued to decline relative to service business, the economic news in the ISM report is still a critical indicator, as manufacturing tends to be the leading economic sector when emerging from or entering a recession.

ISMs' report data - pulled from a national survey of purchasing managers in over 400 manufacturing companies in 20 industries - covers inventories, import and export orders, employment, new orders, prices and delivery times.

Each of these data points is rated for the month - higher, lower or unchanged. From this raw data,indexes for each of these categories are calculated.

Theoretically, a score of 50% or greater indicates strength or expansion vs. the prior month, with under 50% indicating weakness vs. the prior month...and 50% indicating 'steady' conditions. However, several of these categories show break-even points between ~40% to 50% in practice.


ECONOMIC NEWS - THE RETAIL SALES REPORT

Release Importance - ("A-")
Release Time - 8:30AM EST
Release Date - ~ 13th of each month (data for prior month)

Data Source - The Census Bureau of the Dept. of Commerce

The Retail Sales economic news report - a measurement of retail stores total sales receipts - is another important news release, providing a timely and solid window into broad consumer spending patterns, month over month.

A good example is retail auto sales. The total auto sales figures can jump or fall rapidly month-to-month, and that sort of economic news may be indicative of a shift in consumer spending and thus a potential change in the overall U.S. economic health.


ECONOMIC NEWS - THE CPI - CONSUMER PRICE INDEX REPORT

Release Importance - ("B+")
Release Time - 8:30AM EST
Release Date - ~ 13th of each month (data for prior month)

Data Source - Bureau of Labor Statistics, US Dept. of Labor

The CPI economic report - the single most reported inflation indicator - tracks and measures the price level of consumer purchased goods and services(includes food, automobiles, energy, clothing, plus other specific goods/services).


ECONOMIC NEWS - GROSS DOMESTIC PRODUCT

Release Importance - ("B")
Release Time - 8:30AM EST
Release Date - ~3rd or 4th week of each month (data for prior quarter)

Data Source - Bureau of Economic Analysis, U.S. Dept. of Commerce

The U.S. Gross Domestic Product is largely made up of consumption, inventories, government purchases, investment and net exports, with consumption being the largest part, representing 2/3'rds of the GDP .

It is the broadest measure of our countries overall economic activity, and unlike many other economic reports or economic news, is issued quarterly.


ECONOMIC NEWS - THE DURABLE ORDERS REPORT

Release Importance - ("B")
Release Time - 8:30AM EST
Release Date - ~26th of each month (data for prior month)

Data Source - The Census Bureau of the Dept. of Commerce

Durable goods are those expected to last at least three years or longer (ex: jet aircraft).

Order shipments, dollar volume of orders and as yet unfilled orders are the three components measured by the Durable Orders economic report.

The economic news from the monthly Durable Goods report is considered a leading indicator, pointing to potential manufacturing activity growth or slowness in the coming months and quarters.


ECONOMIC NEWS - INDUSTRIAL PRODUCTION

Release Importance - ("B-")
Release Time - 9:15AM EST
Release Date - ~15th of each month (data for prior month)

Data Source - Federal Reserve

This economic report is a measurement of the physical output of our countries factories, utilities and mines, with manufacturing sector comprising the largest component.

Due to the uncertainties in weather conditions, the utility component of this report can experience swings, due to volatile production changes driven by extreme hot or cold temperature spells.

This variable can drive utility production up or down based on consumer demand for products (ex: natural gas, oil, etc), or electricity (ex: air conditioning).

If you are trading the Energy commodities, you can no doubt see how volatility (wide and sometimes violent price swings/moves)in these products may create unique futures trading opportunities.

Watching the economic news provided in its' monthly release may help you take advantage of such opportunities.


ECONOMIC NEWS - THE PPI - PRODUCER PRICE INDEX REPORT

Release Importance - ("B-")
Release Time - 8:30AM EST
Release Date - ~11th of each month (data for prior month)

Data Source - Bureau of Labor Statistics, US Dept. of Labor

The PPI tracks and measures the wholesale prices of goods. Of three 'goods' subcategories, the "finished goods" index...products ready for sale to consumers/end users, (vs. "crude" and "intermediate" indexes)...watched by the financial markets more closely.

The markets tend to favor the PPI "core" rate. Like the CPI core rate, it excludes food and energy prices due to their tendency toward more volatile price movements, which cloud underlying inflation rate trends.


ECONOMIC NEWS - HOUSING STARTS / BUILDING PERMITS

Release Importance - ("B-")
Release Time - 8:30AM EST
Release Date - ~16th of each month (data for prior month)

Data Source - The Census Bureau of the Dept. of Commerce

The Housing Starts economic news report tracks just that - the number of residential (primarily) home units (where foundation excavation has begun)that month.

The Building Permits report does likewise, for the most part. It measures the number of building permits issued to allow for the excavation of a new home's foundation. (Building Permits usually, but not always, are required).

Both of these indicators are tied to a reduction in new home mortgage rates. When that occurs look for a subsequent increase in the number of Building Permits and New Housing Starts a few months down the road, as new home buyers are attracted into the market by more attractive mortgage rates.


ECONOMIC NEWS - CONSUMER CONFIDENCE (Consumer Board Consumer Confidence)

Release Importance - ("B-")
Release Time - 10:0AM EST
Release Date - The last Tuesday of each month (data for current month)

Data Source - The Conference Board

The economic news in this report looks to get a bead on the level of current U.s. consumer confidence, with data pulled from a survey to several thousand households.

The survey measures how consumers view their expectations for the future and how they also see current conditions, with survey weight tipped toward their future expectations views.

Occasionally this report may point up a quick change in the consumption patterns of U.S. consumers. Sources indicate that a shift of 5 points or greater in this report as significant, with regard to potential consumer pattern/confidence change.


Hopefully, this section on the major Economic Reports that can move the futures markets gives you an extra tool to use in your trading analysis and may result in you taking advantage of futures trading opportunities the news from these economic reports may create.


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