At different times of the month, you’ll hear news updates about economic indicators, such as existing home sales, automobile sales, consumer sentiment and durable goods orders. If you’re like me, you know these indicators can give you insight into what’s happening in the economy, but you haven’t made the time to systematically track them and understand what they mean. There’s a great new book that can help you make sense of all the data.
Check out The Wall Street Journal Guide to 50 Economic Indicators that Really Matter. Authors Simon Constable and Robert E. Wright have done a great service to anyone interested in this topic. For each indicator, they explain:
- When to look for the data.
- Where to look for the data.
- What to watch for.
- What the data signal for the economy or a particular sector.
- What to do to make money or prevent losing money.
For example, consider automobile sales. Through the book, you’ll learn that auto sales figures are reported on the first business day of each month for the previous month. You can find the data online at the Wall Street Journal’s Market Data Center. (Go to the Calendars & Economy section and find the Auto Sales link.) You can also find the data at the Bureau of Transportation Statistics website. Watch for decreases in new auto sales and leases; it means people are pulling back because of fears about their future employment status. If you see that happening, avoid investing in assets that are sensitive to the economic cycle. In other words, shun stocks in favor of government securities and high-quality corporate bonds.
Buy the book, and you’ll learn a lot about how to understand what’s happening in the economy and how you can benefit from your knowledge.
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