Retail Sales

Retail Sales are a key measure of consumer spending, which makes up a full two thirds of economic activity. Both the headline and core figures are equally significant as a barometer of consumers' willingness to spend money on retail goods and consumer durables, such as cars. Yet, the core figure, excluding expenditure on automobiles, gas, and food, is a better reflection of underlying consumer demand.

Market Effect: Moderate
Indicator of Economic Conditions: Strong

Consumer Confidence

Consumer Confidence is considered a key determinant of consumers' future spending plans but as Alan Greenspan once said, it's not what people say that matters, but what they do. Retail Sales is a much more accurate reflection of consumer behavior. Focus on the more closely watched "expectations" component, which gauges consumers expectations for the economy over the next six months.

The data is compiled by the Conference Board from a monthly survey of approximately 5,000 households. Respondents are first asked about their perceptions of national economic conditions, and subsequently, they are queried about their personal circumstances and buying plans for new homes and various durable items. The University of Michigan's survey of consumer sentiment is considered to be a better leading indicator but given its small sample size, it only polls 500 to 600 people, it is best used in conjunction with the more robust Conference Board survey.

Market Effect: Moderate
Indicator of Economic Conditions: Moderate

ISM Services Index

The ISM Non-Manufacturing (Services) Index is a survey of purchasing managers in the service sector of the economy and is a barometer of business conditions in that sector, which comprises 85% of the economy. For this reason, it is a significant indicator but being that it is relatively new, having begun in July 1997, the ISM manufacturing index is more closely watched and has a greater effect on the market.

Market Effect: Moderate
Indicator of Economic Conditions: Moderate