Cheat Sheet: Economic Indicators
Well-known economist Gene Sperling reveals his top resources for gauging economic performance in "The Insider's Guide to Economic Forecasting " on page 96 of the August 2003 issue of Inc. Here, Inc.com provides an interactive directory to his lesser-known resources, complete with links to the original piece via the "Indicator" headings and regular updates on recent research from the various resources.
What to look for: Increases or decreases in spending and hiring plans.
Resources: The Business Roundtable is an association of chief executive officers from leading corporations who are committed to advocating public policies that foster economic growth. Its more than 150 members participate in quarterly surveys, which reveal members' outlooks on the economy.
The Business Council is a voluntary association of business leaders, both current and former chief executive officers, who meet several times a year to discuss major public policy issues. The Business Council periodically surveys its 190 members to gauge CEO mood swings and their respective outlooks on the economy.
Recent data: The Business Roundtable released its quarterly economic outlook on July 16, 2003. Overall, CEOs are more optimistic when compared to the survey's April 2003 results, and they expect the economy to continue to gain some footing. The findings reflect the outlook for the next six months, and revealed, among other information:
- Only 12% of the 117 CEOs surveyed expect to decrease their capital spending over the next six months as compared to 27% last April.
- Sixty-nine percent of CEOs expect their sales to increase, while only 2% expect lower sales over the next six months.
- Sixteen percent of CEOs expect employment growth over the next six months as compared to only 9% last April; 42% expect their employment to drop while 43% expect it to remain the same.
To download a PDF of the complete survey results, go to www.brtable.org/press.cfm/975 and scroll down to the bottom of the press release to find the link "To view economic survey results."
Released in February 2003, The Business Council's biannual survey of its 190 members revealed some less than optimistic outlooks for the coming year, mainly due to geopolitical events, weak foreign economic growth, and increasing energy prices. Twenty-two percent of the CEOs surveyed expected economic growth to be sluggish, while 72% expected moderate growth. On the business front, 55% of CEOs expected their firms' sales to increase in 2003. Fourteen percent expected either slower growth or a drop in sales. CEOs' hiring plans were less optimistic: 46% expected no change in the rate of new hires and 45% expected a slowdown in the rate of new hires.
The Council's next survey results will be available in October 2003.
For more results from the February 2003 survey and for information on the upcoming survey, please contact Clifton Webb at 302-774-4005
What to look for: Fluctuations in the number of employees working part time for economic reasons and in the number of workers employed in temporary jobs.
Resource: The Bureau of Labor Statistics researches and maintains data in the broad field of labor economics and statistics for the Federal Government.
To find information pertaining to part-time workers, go to the Bureau of Labor Statistic's Historical data for series in the monthly Employment Situation news release -- table A-5. Scroll down to find "Part-time for economic reasons" and click to retrieve data.
For information on temporary jobs, BLS compiles data under the label "Temporary Help Services" at www.bls.gov/ces/home.htm. Recent data is included in the "Employment Situation Summary" under the heading "Economic News Releases." You can view the data in Text or PDF format.
For historical data on temporary help, go to "Historical Data for 'B' Tables," then click on "Employees on nonfarm payrolls by industry sector" and scroll down to find "Temporary Help Services."
Recent data: At the end of July 2003, 4.9 million workers were classified as part-time for economic reasons, as compared to 4.4 million in July 2002. Preliminary data revealed 2.3 million workers classified as temporary help services for July 2003, a slight increase from comparable figures for July 2002, which were 2.2 million.
What to look for: Increasing or decreasing same-store sales.
Resources: Wal-Mart's same-store sales information is available via its corporate website. Click on "News Releases" from the homepage, and then look for "Sales and Summaries" for up-to-date information. Wal-Mart provides a recorded telephone message at 479-273-8446 discussing further details for 36 hours after each sales summary is released.
Bank of Tokyo-Mitsubishi Retail Chain Store Index is released monthly and represents same-store sales across 78 major retail chains. Click on the most recent month's retail trends report.
Recent data: Wal-Mart reported net sales of $18.6 billion for the four weeks ending August 1, 2003, an increase of 11.9% over net sales recorded during a similar period in 2002.
Bank of Tokyo-Mitsubishi's tally of 77 chain stores revealed a 4.3% rise in July 2003 as compared to last year's July figures. Comparable store sales for July 2003 totaled $46.7 billion, while during the same four-week fiscal month of July 2002, sales came in at $44.8 billion.
What to look for: Any flattening in the decline of commercial and industrial lending, which would suggest the demand for credit has stabilized or increased. Also look for any loosening or tightening of bank lending standards for small businesses.
Resources: CIL is released by the Federal Reserve weekly for "large commercial banks" and monthly for "all commercial banks." Follow the latest press releases at www.federalreserve.gov/releases/h8.
Historial data can be found via the St. Louis Fed at research.stlouisfed.org.
Find the Federal Reserve's Quarterly Bank Officer Survey at www.federalreserve.gov/boarddocs/SnLoanSurvey.
Recent data: CIL data suggests the demand for credit flattened a bit during between July 2003 and August 20, 2003. For the week ending August 20, CIL came in at $916.9 billion, a decline from its $927.9 billion July 2003 figure. Comparatively, CIL for July 2002 was $978.7 billion.
What to look for: The book-to-bill ratio. When the book-to-bill ratio is one, things are at a steady state. However, a ratio less than one signals a decline in demand; a ratio greater than one suggests things are looking up.
Resources: Semiconductor Equipment and Materials International publishes monthly press releases at www.semi.org/web/wpress.nsf/.
Recent data: North American-based manufacturers of semiconductor equipment posted $763 million in orders in July 2003 and a book-to-bill ratio of 0.97, according to the July 2003 Express Report. A book-to-bill of 0.97 means that $97 worth of new orders were received for every $100 of product billed for the month.
What to look for: The growth in the rate of investment in nonresidential structures. Declining investment suggests that fewer businesses are expanding and have little need to build offices.
Resources: Investment data in nonresidential structures is available as part of the Bureau of Labor Statistics's NIPA series -- the same series that include GDP. You can find a list of all NIPA tables on the site's "Interactive Access to National Income and Product Accounts Tables" at www.bea.doc.gov/bea/dn/nipaweb/index.asp. Choose the link "Choose a table from a list of All NIPA tables." Scroll down to find Table 5.5, "Real Private Fixed Investment" to see data on investment in nonresidential structures.
Recent data: Investment in nonresidential structures went up during the second quarter from 2003 first quarter results, up from $211 million to $214.7 million dollars invested. Compared with the second quarter of 2002, 2003 investment dropped by approximately $17 million.
What to look for: Increases or decreases in the housing market, signifying consumer optimism or pessimism.
Resources: The Office of Federal Housing Enterprise Oversight's quarterly "Housing Price Index" is available at www.ofheo.gov/HPI.asp.
New home sales are reported by the Census Bureau at www.census.gov/const/www/newressalesindex.html.
Recent data: During the second quarter of 2003, the average U.S. home price increased 5.56% from the second quarter of 2002. However, the trend over the last four quarters revealed continued gradual deceleration.
New homes sales increased from 961,000 in July 2002 to 1.17 million in July 2003.