Economic Reports

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We will touch on smaller economic reports that can be squeezed into one post.

Contents:

Retail Sales

Available at 8:30am EST at about 2 weeks after the month ends. The report shows consumers discretionary spending. Bureau of the Census send out questionaires to roughly 4.8k retailers and food services at about 3 days before the month end and retailers are supposed to respond within a week. However, only about 50% of retailers respond in time for the advance monthly report and hence revision can extensive for up to 2 previous months. Furthermore, another 8k retailers are polled a few days later for a more accurate number.

The total nominal dollar receipts of retail sales (minus taxes, returned merchandise etc) are added and reported. Retail figure numbers are also seasonally adjusted. The retail sales number only include sales on goods and food services in restaurants, but not other services such as air travel, dental, movies etc.

In summary, the monthly advance retail numbers are volatile (you can see from the 90% confidence interval) and not representative of the economy as services numbers are not included.

Initial Jobless Claims

Available at 8:30am EST every Thursday covering the previous week released by US Department of Labor Employment and Training Administration. Initial claims are new claim applications for unemployment benefits at the state level.

About 10% of initial claims are rejected due to eligibility requirements. For example, only unemployed personnels that have contributed to employment insurance in the past are eligible which means that new graduates that can’t find jobs are not counted in initial claims.

Initial Jobless Claims tend to rise sharply several months before a recession and tend to decline when coming out of a recession. In other words, the indicator is a leading indicator for recession and coincident indicator for recovery. The Conference Board uses this indicator as one of the 10 leading indicators for LEI.

Employment Cost Index

Released at 8:30am EST in the last week of Jan, Apr, Jul, and Oct by the Bureau of Labor Statistics (BLS). ECI tracks the cost of labor (such as wages, salaries, insurance, social security and benefits) which is one of the biggest expenditure a company has to pay. BLS divides the different occupations into 800 classifications.

Every quarter, BLS will send out surveys to 9.4k private establishments and 1.4k establishments including governments, schools, and hospitals. The surveys collect data for the pay period that includes the 12th of the month in Mar, Jun, Sep, and Dec. Changes in wages/salaries/benefits are converted into an index with base level of 100 and base year 2005.

Job Openings and Labor Turnover (JOLTS)

Released at 10am EST first week of the month by the Bureau of Labor Statistics (BLS). In the Employment Situation report, we only see the net change in the number of jobs and not how many people were actually hired or eliminated. On average 4 to 5 mio of new positions are filled every month but also millions of jobs were lost in those same months.

The Bureau of Labor Statistics breaks down the JOLTS numbers into 3 categories:

Job Openings

The number of jobs available on the last day of each month.

Hires

The number of positions filled each month

Separations

This can be layoffs and discharges due to mergers, downsizing, closing or other causes such as theft. Also included are resignations from employees and “Other Separations” such as retirement, death and disability.

BLS computes the number by contacting 16k non-farm business spanning factories, offices, and retailers in all 50 states.

Monthly New Residential Construction

Available at 8:30am EST at about 2 to 3 weeks after the month ends.

Housing Starts

Housing starts occur when excavation begins for the foundation of a building and also includes structures being rebuild on an existing foundation.

Housing Permits

Builders need to apply for a permit before constructing starts.

Existing Home Sales

Available at 10am EST about 3 to 4 weeks after the month end by National Association of Realtors (NAR). The NAR is a private organization of about 960k realtors in both the residential and commercial real estate market.

About 80% of the property transactions are existing used homes and 20% are new constructed homes. The calculation period only starts when the deed is transferred and not when the initial contract was signed. It takes about 1 to 3 months between the time the contract was signed and when the deed is transferred. In other to be more timely, NAR also publish Pending Home Sales data which is the number of contracts signed but not yet closed.

New Home Sales

Available at 10am EST about 4 weeks after the month end by Bureau of the Census and consistuted about 15% of the residential resal estate market. The sale of newly constructed home is recorded the moment the contract is signed unlike for the existing home sales. The home can be in any stage of construction. Given the nature of new home sales, it tends to lead existing home sales by about 1 to 2 months. New homes also generate more economic activities than existing home sales as it involves construction and others.

Consumer Confidence Index

Released at 10am EST on the last Tuesday of the month by the Conference Board. The survey is based on responses from 5k households and the questions put on emphasis on labor market situations. About only 3k households reply in time for the preliminary release and a revision is sent out the following month. The year 1985 is set at the benchmark of 100.

The following key questions are asked:

  • How would you rate the present general business conditions in your area? Good, normal, or bad?
  • Six months from now, do you think they will be better, the same or worse?
  • What would you say about available jobs in your area right now? Plenty, not so many, or hard to get?
  • Six months from now, do you think there will be more jobs, the same, or fewer jobs?
  • What would you guess your total family incmome to be six months from now? Higher, the same, or lower?

The Conference Board then produces 3 seasonally adjusted indexes:

Present Sitations Index

Reflects consumers’ attitudes about current conditions

Expectations Index

Reflects how consumers feel conditions might change in the next 6 months

Overall Consumer Confidence Index

Based on the composite of the key 5 questions. Expectations make up 60% of the index while opinions about current situation make up the rest 40%.

The report is by subscription only but the numbers and summaries are released to the press and online.

Survey of Consumer Sentiment

Released at 9:55am EST. Preliminary numbers are released on the second Friday f each month and the final number last friday of the same month by the University of Michigan. This survey is more closely followed than The Conference Board Consumer Confidence Index and even included in the Conference Board Leading Economic Indicators. 1966 is the base year with index of 100.

Compared to the 5k respondents of the Consumer Confidence Index, the Sentiment Survey interview only 500 individuals in a rotating manner. 60% of the consumers are polled first time, while 40% are polled second time. There are about 50 questions ranging from current and expected personal finance conditions.

The main Index of Consumer Sentiment is based on two sub indexes:

  • Index of Current Economic Conditions
  • Index of Consumer Expectations

The 5 key questions asked:

  • Are you and your family (living with you) better off or worse off financially than you were a year ago?
  • Do you think a year from now you and your family living there will be better off financially, worse, or just about the same as now?
  • Do you think that during the next 12 months we’ll have good times financially, bad times, or otherwise?
  • Looking ahead, what is more likely: that in the country as a whole, we’ll have continued good times during the next five years or so, or that we will have periods of unemployment and depression, or otherwise?
  • About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, things like that. Generally speaking, do you think now is a good or bad time to buy major household items?

Similary to the Consumer Confidence Index, the report is only available to subscribers but summary and numbers are released online.

ISM Service Survey

Released at 10am on the 3rd business day (2 business day after ISM Manufacturing Survey). Less popular than the manufacturing survey as it is a newer survey with less historical record and also the services sector is less cyclical than the manufacturing sector.

The service survey based more on purchasing finished product than raw materials. Rather than a diffusion index, the service survey uses a “Business Activity Index”. Questionnaires are similarly sent out to 370 purchasing managers in more than 62 different industries. Purchasing managers are asked to assess whether the following activies are rising, falling or unchanged:

  • Business Activity (25%)
  • New Orders (25%)
  • Employment (25%)
  • Supplier Deliveries (25%)
  • Inventories
  • Customer Inventories
  • Prices
  • Backlog of orders
  • New Export Orders
  • Imports.

An index over 50 signal growth, below 50 contraction and 50 signal no change.

ISM Manufacturing Survey

Released at 10am EST on the first business day by Institue for Supply Management (ISM) based in Temple, Arizona. Formerly ISM is known as the National Association of Purchasing Agents. No monthly revision but seasonal adjustment factors are reevaluated every January.

The survey is done on purchasing manager by miling out questionnaires to about 400 member companies representing 20 industries. Purchasing managers are asked to assess whether the following activies are rising, falling or unchanged:

  • New Orders (20%)
  • Production (Manufacturing Output) (20%)
  • Employment (20%)
  • Supplier Deliveries (20%)
  • Inventories (20%)
  • Customers’ Inventories (Guess customer’s inventories)
  • Commodity Prices
  • Backlog of orders
  • New export orders
  • Imports

The first 4 queries are complied into the PMI diffusion index. The diffusion index is calculated by taking the percentage of those who reported activity being higher in each of the 5 components and adding half the percentage of those who reported seeing no changes. If the result is above 50, it means the manufacturing sector is growing and below 50 means it is contracting. An index close to 50 signal no change.

Scrap Data

Retail Sales

url <- "https://www.census.gov/retail/sales.html"    

page <- read_html(
  paste0(url)
)

page |>
  html_nodes("#detailContent .richtext") |>
  html_text()

ECI

The first 3 rows are seasonally adjusted.

url <- "https://www.bls.gov/eci/latest-numbers.htm"      
page <- read_html(
  paste0(url)
)

cbind(
  page |>
    html_nodes(".ln-group2 .eci .title") |>
    html_text(),
  page |>
    html_nodes("#latest-numbers .data") |>
    html_text()
)

JOLTS

url <- "https://www.bls.gov/jlt/latest-numbers.htm"      
page <- read_html(
  paste0(url)
)

cbind(
  page |>
    html_nodes("#latest-numbers strong") |>
    html_text(),
  page |>
    html_nodes("#latest-numbers .data") |>
    html_text()
)

Monthly New Residential Construction

url <- "https://www.census.gov/construction/nrc/current/index.html"    

page <- read_html(
  paste0(url)
)

page |>
  html_nodes("#detailContent .richtext") |>
  html_text()

Initial Jobless Claims

start <- Sys.Date() - 7
end <- Sys.Date()

tq_get("ICSA", from = start, to = end, get = "economic.data")

Existing Home Sales

url <- "https://www.nar.realtor/infographics/existing-home-sales-housing-snapshot"

page <- read_html(
  paste0(url)
)

page |>
  html_nodes("p+ p") |>
  html_text()

tq_get("EXHOSLUSM495S", from = Sys.Date() - months(6), to = Sys.Date(), get = "economic.data")

New Home Sales

url <- "https://www.investing.com/economic-calendar/new-home-sales-222"     

page <- read_html(
  paste0(url)
)

page |>
  html_nodes("#releaseInfo") |>
  html_table()

Survey of Consumer Sentiment

tq_get("UMCSENT", from = Sys.Date() - months(6), to = Sys.Date(), get = "economic.data")

See Also

Employment Situation

CPI Report

PPI Report

References

Secrets of Economic Indicators

A Guide to Everyday Economic Statistics (Amazon)

Advance Monthly Sales for Retail and Food Services

Advance Monthly Sales for Retail and Food Services (pdf)

New Privately-Owned Housing Units Started: Total Units (HOUST) (FRED)

Construction Spending

Construction Methodology

DOL Initial Jobless Claims News Release

US Consumer Confidence (The Conference Board)

Surveys of COnsumers (University of Michigan)

Job Openings and Labor Turnover Survey

Manufacturing PMI (ISM)

Services PMI (ISM)

Jason

Passionate software developer with a background in CS, Math, and Statistics. Love challenges and solving hard quantitative problems with interest in the area of finance and ML.