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Which Economic Indicators Matter?

by Charles Rotblut, CFA and Aaron Smith

Aaron Smith is a senior economist for Moody’s Economy.com. He spoke to me recently about the economic indicators he watches and what they may be signaling for the direction of the economy and markets.

—Charles Rotblut, CFA

Charles Rotblut (CR): What economic data do you consider to be the most important to look at?

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Charles Rotblut, CFA is a vice president at AAII and editor of the AAII Journal. Follow him on Twitter at twitter.com/charlesrotblut.
Aaron Smith is a senior economist for Moody’s Economy.com and associate editor of the North American edition of the Dismal Scientist website, producing real-time online commentary and weekly analysis on the U.S. macroeconomy.


Discussion

Oh Yeah from Hawaii posted over 2 years ago:

I am wondering "how jobs created...generate income necessary for spending"?

Option 1: If the govt. creates the jobs by waving a magic wand and says - build a bridge here, a dam there, etc then the govt has to borrow the money at interest from the Federal Reserve. Money is printed = inflation+debt, so everyone's existing currency is devalued and if americans are responsible for the debt, more enslaved. All that is really created is a transfer of wealth from what already exists to another, albeit involuntarily.

Option 2: A private business expands, and opens an xyz store. This store hires people, does business. XYZ can only reduce the amount of money other stores (recipients) might get by increasing the number of places the existing money can be spent. If there is one store in town it might do well, if there are 5,000 they might all be in poverty or in the unemployment line.

So how are these jobs being created (obamtronic magic wand?) and where is the money coming from (borrowed, debt, inflation or existing thereby diluting the amount that might be spent in existing businesses)?


John from Washington posted over 2 years ago:

How about making this article practical by citing websites where this data may be found!


Vaidy Bala from posted about 1 year ago:

I spent 15 minutes to read and understand. I still don't have a clue on specific indicators /sectors to look at.
Can someone help?


Vaidy Bala from posted about 1 year ago:

I spent 15 minutes to read and understand. I still don't have a clue on specific indicators /sectors to look at.
Can someone help?


Vaidy Bala from posted about 1 year ago:

I spent 15 minutes to read and understand. I still don't have a clue on specific indicators /sectors to look at.
Can someone help?


Charles Rotblut from Illinois posted about 1 year ago:

Vaidy,

The indicators Aaron listed as most important are employment stastics (the monthly jobs reporta weekly initial jobless claims) and the Institute for Supply Management (ISM) surveys.

-Charles


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