Part 3.
Turnover or retail volumes, orders and inventories
This type of data measures retail trade turnover. As a rule, the retail business is, in simple words, a place where you and I go to shop to buy basic necessities and luxury goods.
It is important because it is an excellent indicator of consumer demand within a particular economy. In certain countries, especially in the G8 countries, retail trade volumes may account for two-thirds of all consumer spending.
They are a key indicator of consumer confidence. If consumers are confident in their economic situation, additional demand for goods and services is created.
Economists track the growth of trade turnover – it helps to determine whether the economy is doing well. If the trade turnover falls, things are bad in the economy.
Turnover or volume of wholesale trade, orders and stocks
This type of data measures the turnover of wholesale businesses.
It is important because it is an indicator of consumer demand – which, as we know, is a serious thing. A decrease in wholesale sales or inventories may imply or confirm a decrease in business activity and retail demand. This means that there are free resources that are not currently being used, but they will be used if demand increases again.
This type of data is not as important as retail trade volumes, but most economists believe that it is still worth keeping an eye on.
Import of goods and services
In this type of data, purchases of domestic companies from companies from abroad are measured. If, for example, you are a Canadian company that buys raw materials from China, then this is considered an import of goods to Canada.
This type of data is important, since imports may eventually replace domestic production, which may cause tension in financial resources. For example, if everyone in the United States starts buying only German car brands, such as BMW and Audi, this will lead to a lack of demand for cars manufactured in the United States, such as Ford and GM. Which will have a negative impact on domestic car manufacturers in the United States.
As a rule, a country imports those goods and services that it is not able to produce on its own. But, of course, this is not always the case. Often people and companies buy abroad because prices are lower there.
Another reason is that there may be goods of the desired quality abroad that are not available at home. For example, if you live in the United States and have a strong desire to drive around in a Rolls Royce or Bentley that has just rolled off the assembly line, you will have to buy your car in the UK.
Oil is often not taken into account in the US data, as it has developed that the states are always forced to import it – the country does not produce enough oil to meet domestic demand. However, thanks to the new drilling technology in the US, oil production is growing – there are chances that over time it will be enough to cover the demand. You may have to do a little independent research on this topic – it depends on when you read this material.
Export of goods and services
This type of data measures the country's trade turnover with other countries around the world. Simply put, this is the direct opposite of importing goods and services.
It is important because exports generate an influx of foreign currency, which can have a good effect on economic growth. It happens that a foreign currency is more valuable than a local one – this creates additional profit in the balance sheet of a local company. For example, if a company from Canada sells its product to the UK, it receives British pounds as payment. This is a very attractive deal, since (at the time of writing this article) 1 pound can be exchanged for 1 Canadian dollar 75 cents.
Export growth can boost GDP, which will have a positive impact on the economy. The higher the ratio of a country's exports to its GDP, the faster its economic output will grow.
Trade balance, the balance of trade in goods
In this type of data, the balance or the difference between all exported goods and all imported goods for a certain time period is measured. The main question is – what is more in the country, exports or imports?
It is important because it is an indicator of a country's fundamental trading position in relation to other countries. Obviously, most countries prefer their exports to be higher than imports.
A large foreign trade deficit may suggest to economists that there are difficulties with the supply – companies are unable to meet the demand coming from abroad.
The trade balance reflects the ratio between national savings and investments of citizens and companies of the country in question. The deficit is an indicator that investments exceed savings in their volumes, and the use of real monetary resources exceeds the overall economic result of the country.
Index of export and import prices, unit price of the product
This type of data measures the prices of goods that one country trades with others.
It is important because it is an indicator of pressure on prices, possible problems with the exchange rate and changes in competition.
Economists compare export prices with price indicators on the domestic market to get an idea of the pressure on prices for foreign buyers exerted by domestic producers.
Economists also monitor import prices to determine the level of external pressure on prices and evaluate these indicators.
Manufacturer's prices and wholesale prices
In this type of data, factory prices are measured – that is, how much it costs the manufacturer to manufacture goods without adding extra charges.
It is important because it can be used as a leading indicator of price pressure affecting domestic production volumes. It should be borne in mind that during a recession, the industrial Price Index (Producer Price Index, PPI) may exaggerate the pressure on prices.
On the other hand, during periods of inflation, PPI can downplay prices, because contracts and purchases of raw materials are usually negotiated in advance long before production and release of products.
Price expectations: surveys
The purpose of these surveys is to study the opinion of manufacturing companies regarding inflation. In simple words, this type of data sums up what company directors think about the impact of inflation on their business at the moment and in the near future.
It is important because it allows you to look into the heads of people working in the trenches of production. It can serve as a warning about possible changes in prices.
Economists, as a rule, track changes in the trend of this indicator in order to predict a possible increase or decrease in pressure on prices.
Wages, labor income, labor costs
Salaries and labor incomes give us an idea of how much people earn from their jobs. Labor costs are how much the labor of workers costs the manufacturer. All these indicators reflect labor costs and the impact on consumer incomes.
They are important because they reflect the pressure on prices and demand within the economy. Salaries and incomes are closely related to the current phase of the economic cycle. If incomes are growing faster than consumer price inflation, it means that real spending is growing, which is an indicator of the health of the economy.
Unit labor costs
In this type of data, the cost of labor per unit of output is measured. In other words, how much the labor costs for the production of one unit of goods cost the manufacturer.
It is important because it is an indicator of the competitiveness of businesses and pressure on prices within the country. For example, if a company is engaged in production in a country with cheap labor, and sells its goods abroad, these are large potential profits. Conversely, if a company's production is located in a country with expensive labor, then it probably will not be able to withstand competition with foreign companies using cheaper labor.
This is a key indicator of labor efficiency. If unit labor costs decrease, it means that the same amount of products can be produced for less money, since manufacturers will need to pay their workers less for the output of each unit of production. Which, of course, makes the manufacturer more competitive. If labor costs start to rise, then this can pose a threat to the viability of companies, because the production of products will start to cost them too much. Obviously, companies need to earn money to stay in business, so cheap labor is always preferable.
Consumer or retail prices
This type of data measures the price of a basket of goods and services consumed by an ordinary family to maintain the current standard of living. It includes clothing, food, rent, transportation expenses, and so on. In general, everything you need for food, sleep and earning enough money to survive.
It is important because it reflects the inflation experienced by a typical family of a particular country.
Here you need to ask yourself this question – are ordinary goods in general more expensive or cheaper for consumers? Will the consumer have more money in his pocket at the end of this year than at the end of the previous one? The answer can tell us a lot about whether the standard of living is rising or falling and what part of the economic cycle we are in now.
Conclusion
As you can see, when it comes to publishing fundamental economic data, many key concepts have to be taken into account. If you have difficulty assimilating or remembering all this information – try not to overload yourself!
Use all the information and then you will earn more than the rest!
Good luck!
Turnover or retail volumes, orders and inventories
This type of data measures retail trade turnover. As a rule, the retail business is, in simple words, a place where you and I go to shop to buy basic necessities and luxury goods.
It is important because it is an excellent indicator of consumer demand within a particular economy. In certain countries, especially in the G8 countries, retail trade volumes may account for two-thirds of all consumer spending.
They are a key indicator of consumer confidence. If consumers are confident in their economic situation, additional demand for goods and services is created.
Economists track the growth of trade turnover – it helps to determine whether the economy is doing well. If the trade turnover falls, things are bad in the economy.
Turnover or volume of wholesale trade, orders and stocks
This type of data measures the turnover of wholesale businesses.
It is important because it is an indicator of consumer demand – which, as we know, is a serious thing. A decrease in wholesale sales or inventories may imply or confirm a decrease in business activity and retail demand. This means that there are free resources that are not currently being used, but they will be used if demand increases again.
This type of data is not as important as retail trade volumes, but most economists believe that it is still worth keeping an eye on.
Import of goods and services
In this type of data, purchases of domestic companies from companies from abroad are measured. If, for example, you are a Canadian company that buys raw materials from China, then this is considered an import of goods to Canada.
This type of data is important, since imports may eventually replace domestic production, which may cause tension in financial resources. For example, if everyone in the United States starts buying only German car brands, such as BMW and Audi, this will lead to a lack of demand for cars manufactured in the United States, such as Ford and GM. Which will have a negative impact on domestic car manufacturers in the United States.
As a rule, a country imports those goods and services that it is not able to produce on its own. But, of course, this is not always the case. Often people and companies buy abroad because prices are lower there.
Another reason is that there may be goods of the desired quality abroad that are not available at home. For example, if you live in the United States and have a strong desire to drive around in a Rolls Royce or Bentley that has just rolled off the assembly line, you will have to buy your car in the UK.
Oil is often not taken into account in the US data, as it has developed that the states are always forced to import it – the country does not produce enough oil to meet domestic demand. However, thanks to the new drilling technology in the US, oil production is growing – there are chances that over time it will be enough to cover the demand. You may have to do a little independent research on this topic – it depends on when you read this material.
Export of goods and services
This type of data measures the country's trade turnover with other countries around the world. Simply put, this is the direct opposite of importing goods and services.
It is important because exports generate an influx of foreign currency, which can have a good effect on economic growth. It happens that a foreign currency is more valuable than a local one – this creates additional profit in the balance sheet of a local company. For example, if a company from Canada sells its product to the UK, it receives British pounds as payment. This is a very attractive deal, since (at the time of writing this article) 1 pound can be exchanged for 1 Canadian dollar 75 cents.
Export growth can boost GDP, which will have a positive impact on the economy. The higher the ratio of a country's exports to its GDP, the faster its economic output will grow.
Trade balance, the balance of trade in goods
In this type of data, the balance or the difference between all exported goods and all imported goods for a certain time period is measured. The main question is – what is more in the country, exports or imports?
It is important because it is an indicator of a country's fundamental trading position in relation to other countries. Obviously, most countries prefer their exports to be higher than imports.
A large foreign trade deficit may suggest to economists that there are difficulties with the supply – companies are unable to meet the demand coming from abroad.
The trade balance reflects the ratio between national savings and investments of citizens and companies of the country in question. The deficit is an indicator that investments exceed savings in their volumes, and the use of real monetary resources exceeds the overall economic result of the country.
Index of export and import prices, unit price of the product
This type of data measures the prices of goods that one country trades with others.
It is important because it is an indicator of pressure on prices, possible problems with the exchange rate and changes in competition.
Economists compare export prices with price indicators on the domestic market to get an idea of the pressure on prices for foreign buyers exerted by domestic producers.
Economists also monitor import prices to determine the level of external pressure on prices and evaluate these indicators.
Manufacturer's prices and wholesale prices
In this type of data, factory prices are measured – that is, how much it costs the manufacturer to manufacture goods without adding extra charges.
It is important because it can be used as a leading indicator of price pressure affecting domestic production volumes. It should be borne in mind that during a recession, the industrial Price Index (Producer Price Index, PPI) may exaggerate the pressure on prices.
On the other hand, during periods of inflation, PPI can downplay prices, because contracts and purchases of raw materials are usually negotiated in advance long before production and release of products.
Price expectations: surveys
The purpose of these surveys is to study the opinion of manufacturing companies regarding inflation. In simple words, this type of data sums up what company directors think about the impact of inflation on their business at the moment and in the near future.
It is important because it allows you to look into the heads of people working in the trenches of production. It can serve as a warning about possible changes in prices.
Economists, as a rule, track changes in the trend of this indicator in order to predict a possible increase or decrease in pressure on prices.
Wages, labor income, labor costs
Salaries and labor incomes give us an idea of how much people earn from their jobs. Labor costs are how much the labor of workers costs the manufacturer. All these indicators reflect labor costs and the impact on consumer incomes.
They are important because they reflect the pressure on prices and demand within the economy. Salaries and incomes are closely related to the current phase of the economic cycle. If incomes are growing faster than consumer price inflation, it means that real spending is growing, which is an indicator of the health of the economy.
Unit labor costs
In this type of data, the cost of labor per unit of output is measured. In other words, how much the labor costs for the production of one unit of goods cost the manufacturer.
It is important because it is an indicator of the competitiveness of businesses and pressure on prices within the country. For example, if a company is engaged in production in a country with cheap labor, and sells its goods abroad, these are large potential profits. Conversely, if a company's production is located in a country with expensive labor, then it probably will not be able to withstand competition with foreign companies using cheaper labor.
This is a key indicator of labor efficiency. If unit labor costs decrease, it means that the same amount of products can be produced for less money, since manufacturers will need to pay their workers less for the output of each unit of production. Which, of course, makes the manufacturer more competitive. If labor costs start to rise, then this can pose a threat to the viability of companies, because the production of products will start to cost them too much. Obviously, companies need to earn money to stay in business, so cheap labor is always preferable.
Consumer or retail prices
This type of data measures the price of a basket of goods and services consumed by an ordinary family to maintain the current standard of living. It includes clothing, food, rent, transportation expenses, and so on. In general, everything you need for food, sleep and earning enough money to survive.
It is important because it reflects the inflation experienced by a typical family of a particular country.
Here you need to ask yourself this question – are ordinary goods in general more expensive or cheaper for consumers? Will the consumer have more money in his pocket at the end of this year than at the end of the previous one? The answer can tell us a lot about whether the standard of living is rising or falling and what part of the economic cycle we are in now.
Conclusion
As you can see, when it comes to publishing fundamental economic data, many key concepts have to be taken into account. If you have difficulty assimilating or remembering all this information – try not to overload yourself!
Use all the information and then you will earn more than the rest!
Good luck!
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🔻FREE Telegram channel🔻
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🔻Contact for Paid SIGNALS🔻
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