Beginners Terms

Terms

ISM Non-Manufacturing – An index based on surveys of more than 400 non-manufacturing firms’ purchasing and supply executives, within 60 sectors across the nation

PPI (Producer Price Index) – A family of indexes that measures the average change in selling prices received by domestic producers of goods and services over time. PPIs measure price change from the perspective of the seller.

CPI (Consumer Price Index) – A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care. The CPI is calculated by taking price changes for each item in the predetermined basket of goods and averaging them; the goods are weighted according to their importance. Changes in CPI are used to assess price changes associated with the cost of living.

Cap Util – Capacity Utilization -A metric used to measure the rate at which potential output levels are being met or used. Displayed as a percentage, capacity utilization levels give insight into the overall slack that is in the economy or a firm at a given point in time.

Durable Goods – New orders for U.S. core durable goods, (goods that last for 3 or more years) which are the total durable goods orders excluding transportation equipment. The new orders numbers are closely followed by market participants as they provide indications on current economic conditions as well as future production commitments in the manufacturing sector.

Non-Durable Goods – or soft goods (consumables) are the opposite of durable goods. They may be defined either as goods that are immediately consumed in one use or ones that have a lifespan of less than 3 years.

NFP – Non Farm Payrolls – A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business, excluding the following employees: – general government employees. – private household employees.

Initial Jobless Claims – A measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This number is watched closely by financial analysts because it provides insight into the direction of the economy. Higher initial claims correlate with a weakening economy.

Continuing Claims – refers to unemployed workers that qualify for benefits under unemployment insurance. In order to be included in continuing claims, the person must have been covered by unemployment insurance and be currently receiving benefits.

Factory Orders – An economic indicator that reports the dollar level of new factory orders for both durable and non-durable goods.

Unemployment Rate – (U3) a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. During periods of recession, an economy usually experiences a relatively high unemployment rate.

Labor Force Participation Rate – A measure of the active portion of an economy’s labor force. The participation rate refers to the number of people who are either employed or are actively looking for work.

Underemployment Rate – (U6) workers that are highly skilled but working in low paying jobs, workers that are highly skilled but work in low skill jobs and part-time workers that would prefer to be full-time.

Regional Federal Reserve Manufacturing Surveys – Empire State (Northeast Region), Kansas City, Dallas, Philadelphia, Richmond, Chicago, Cleveland.

Federal Reserve System -The nation has been divided into twelve Federal Reserve Districts, with Banks in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

Beige Book – a summary and analysis of economic activity and conditions, prepared with the aid of reports from the district Federal Reserve Banks and issued by the central bank of the Federal Reserve for its policy makers before a Federal Open Market Committee meeting.

Market Indexes

INDU – Dow Jones Industrials

SPX – S&P 500 Index

RTY – Russel Small Cap

CCMP – Nasdaq Composite Index

W5000 – Wilshire 5000 Index

FTSE– UK Industrial Index

CAC 40 – France Industrial Index

DAX – German Industrial Index

Eurostoxx – an index of the top 50 industrial companies in a 12 nation Eurozone complex

IBEX 35 – Spain

FTSE MIB – Italy

OMX StkH30 – Stockholm

SMI – Switzerland Industrial Index

MICEX – Russian Index

Nikkei 225 – Japanese Index

Hang Sang – Hong Kong Index

Shanghai Comp – China Index

ASX – Australian Index

Acronyms

FED – Federal Reserve Bank of the United States

BoJ – Bank of Japan

PboC – People’s Bank of China

RBA – Reserve Bank of Australia

ECB – European Central Bank

EZ – Euro Zone

Bundesbank – German Central Bank

Kenny PolcariBeginners Terms