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Yesterday on Twitter, Ezra Klein asked people for their favourite economic indicators.There are so many that come out (usually a couple every day) that it can be hard to choose what to pay the most attention to.
So we decided to figure out some of our favourites.
A few notes:
- For simplicity, we’re just going with US data here. There’s a lot of interesting and important international information, but that’s for another post.
- We’re excluding “market” data. So for example, the price of copper is incredibly important, but it’s market, rather than economic data. Same with the yield on the 10-year bond. Crucial, but not what we’re calling economic data.
- This list excludes housing data. Yes, this has been incredibly important for the last few years, but in normal times, housing shouldn’t be that exciting in one direction or another. So for the sake of creating a timeless list of indicators that will never do you wrong, we’re just leaving housing off for now.
OK, so without further ado…
Initial jobless claims. This numbers comes out every Thursday, and is a great high-frequency look at the labour market. The number correlates incredibly well with the stock market.
Auto sales. This is another great labour market proxy, as inclination to buy a car is a great sign of employment, confidence, and general economic health.
Goldman-ICSC same store. This is the best high-frequency look at the pulse of the consumer. It's very easy to see how things are stacking up compared to how they were a year ago.
Consumer credit. It may have negative long-term implications, but basically, the more the consumer is taking on debt, the better for the overall economy.
Commercial and industrial loans at major banks. A great measure of whether businesses have demand for new capital, and are thus investing/hiring.
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