ISM Manufacturing PMI
Reflects purchasing trends among large firms in the manufacturing sector. Readings above 50 indicate expansion/positive, while below 50 indicate contraction/negative.
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Helpful Tips
Clear and concise explanations for reading and interpreting economic data accurately.
Understanding Economic Data
To perform fundamental analysis based on incoming data, it's essential to understand what each indicator represents and its potential impact on the market. Below are brief explanations of some frequently encountered economic indicators.
ISM Non-Manufacturing PMI
Measures purchasing trends in the services sector. Again, 50 is the benchmark level for expansion or contraction.
ADP Non-Farm Employment Change
A leading indicator released before the official Non-Farm Payrolls data; it reflects the change in the number of salaried permanent employees.
Non-Farm Payrolls
Shows the monthly change in employment excluding the agricultural sector. Growth in employment generally supports the economy and can strengthen the currency.
Unemployment Rate
Indicates the percentage of people actively seeking work relative to the total labor force. A decline in unemployment is typically seen as positive.
Average Hourly Earnings
Measures wage changes for employees excluding the agricultural sector. Increases in wages may indicate inflationary pressure and can be positive for the economy.
Initial Jobless Claims
Released weekly, this data shows the number of people filing for unemployment benefits for the first time. A decrease is positive; an increase is negative.
CPI (Consumer Price Index)
Measures price changes in goods and services frequently consumed by households. Used as an indicator of inflation and influences monetary policy decisions.
Quick Tips:
- Taking positions before key data releases is often profitable — experienced traders assess the expected reaction.
- When interpreting data, the difference between expected (consensus) and actual results is crucial — surprises may trigger sharp price moves.
- By following economic calendars and time zones, you can protect yourself from news-driven volatility.
Source: Education Center
Last updated: September 11, 2025
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