1. Reading the Economy

2. Rate of Change New – Old Old 600 – 500 =.2 = 20% 500

3. What To Look For What was expected? What happened? If they are different, the markets will react. How will the news affect the Fed?

4. Four Data Adjustments Real vs Nominal Moving Averages Seasonal Adjustments Core rates of price changes – excluding volatile food and energy sectors

5. Gross Domestic Product GDP = C + I + G + (X-M)

6. GDP 2000

7. Economic Growth The Rate of Change of REAL GDP

8. Employment Household Survey – Unemployment rate Establishment Survey – new jobs created Employment Cost Index Initial Claims for Unemployment Productivity and Unit Labor Costs

9. Real vs. Nominal GDP Year 1Year 2Difference% change Nominal 2202806027% IPD 110120 Real 2002333316.5%

10. Real Oil Prices

11. Real Teacher Salaries

12. Real Minimum Wage

13. Prices *Core Producer Price Index *Core Consumer Price Index Implicit Price Deflator * excluding the volatile food and energy sectors

14. The Consumer Personal Consumption Expenditures Retail Sales Index of Consumer Confidence Personal Income

15. Other Market Movers Any situation in an oil producing nation War and Peace Statements by Policy Makers Earnings reports