: Leading type Indicator source: Federal Reserve Board of Governors Release frequency: 2nd to 3rd week of each month 🔹 Key data includes The industrial output value mainly depends on the month on month ratio, and fluctuations in the industrial sector constitute the majority of economic growth fluctuations. The output value of the automotive industry, when combined with automotive retail, can reflect the inventory status of the automotive industry. The potential for equipment utilization, capital expenditure growth, and inflation. 🔹 Market meaning 1. The industrial output indicator is usually considered the most relevant short-term signal to the business cycle. The Federal Reserve closely monitors it because inflationary pressures always first manifest in industrial production, especially when producers or buyers feel tight supply of base metals. This indicator measures the output value of goods, which accounts for approximately 25% of GDP, making it an important signal for estimating GDP for the current quarter. The industrial output report contains detailed industry-specific data, such as the automotive and parts industries. This indicator is also classified and reported according to the nature of finished products, including final products (such as consumer products and industrial equipment), materials, and non industrial equipment (such as prefabricated building components). This classification is very helpful, as each classification information can provide analytical clues for relevant economic aspects. For example, the output value of industrial equipment may help analyze capital expenditures for the current quarter. In addition, the manufacturing industry has stronger cyclicality compared to the service industry, so this indicator is considered to be more sensitive in reflecting the stage of the economic cycle and has certain significance for predicting economic turning points. 2. Equipment utilization rate, also known as capacity utilization rate, refers to the industrial operating rate, which is released together with the industrial output report. It measures the proportion of realized economic growth potential. It takes a long time for capital to be invested and form actual production capacity, so industrial production capacity is always assumed to grow at a very low rate every month, which means that equipment utilization severely restricts changes in industrial output value. In the previous economic cycle, when the equipment utilization rate was below 80%, it was considered that a lot of production capacity was idle in the economy; When it exceeds 80%, inflationary pressure begins to emerge. However, in the past 20 years, as a mega importing country, the United States has clearly used excess foreign production capacity to hedge against high domestic labor rates, successfully suppressing domestic inflation. 🟩 Producer's shipment, inventory, and order investigation (M3) These indicators provide broad monthly data on the economic conditions of the domestic manufacturing industry. The US Census Bureau believes that the survey not only reflects the current industrial activities, but also provides predictions for the future economic situation. Indicator meaning: Predicting future output value and overall supply chain operation status of the industry Indicator type: Leading type Source: US Census Bureau Release frequency: The release time of the entire set of data is not uniform, as detailed below; 🔹 Key data includes Factory orders, the purchasing intentions received by producers from consumers, businesses, or departments, can help clarify whether the economy is expanding or contracting. Durable consumer goods orders, according to the definition of the U.S. Census Bureau, are products with a service life of more than three years, such as cars, washing machines, etc. This data is part of the factory orders (in contrast, there are also non durable goods orders). Excluding durable goods orders for transportation vehicles, transportation vehicles are a highly volatile component of durable consumer goods, especially aircraft orders that can undergo drastic changes. Therefore, excluding the number of orders for transportation is more conducive to understanding the trend of economic development. Unfinished orders for durable consumer goods and the value of unfulfilled orders during the reference period can also be understood as production backlog or order backlog. The calculation method is to add the unfinished orders at the beginning of the period to the new orders received during the period (excluding cancellations), and subtract the net sales. Order backlog means that output and demand are not synchronized, often leading to a decline in future output. *Similar to this indicator, there is also an unfinished order for non durable consumer goods with less market attention. 🔹 Market and Economic Implications The indicators related to durable consumer goods provide in-depth information about the entire supply chain and are also leading indicators of capital expenditure and industrial output. Therefore, compared to other indicators, this indicator is more helpful in helping investors understand the profitability of industries such as machinery, technology, manufacturing, and transportation. Durable consumer goods data fluctuates greatly, and corrections are also common. Investors and analysts generally use monthly averages rather than relying too heavily on specific numbers for a particular month. The selection of specific indicators is also very particular. More precisely, non defense core capital goods orders and shipments (excluding non defense durable goods such as aircraft and components) provide more detailed information on monthly capital expenditures or commercial fixed investments. 🔹 Release time and revisions Factory order data is released two months later, with the previous month's values released in the first week of each month; The first estimated value of durable consumer goods orders is released at the end of the following month, and the revised value is released together with factory order data in the first week of the second month of the reporting period. 🟩 Trade: This statistic covers both commodity trade and service trade, measuring the difference in US dollars between exports and imports of goods and services. Indicator meaning: relative strength of economic competitiveness Indicator type: difficult to distinguish, needs to be discussed in a broader framework Indicator source: Bureau of Economic Analysis, United States Release frequency: lag by two months, first week of each month 🔹 Key data includes The nominal trade balance is the difference between US exports and imports calculated based on the current value of the US dollar. The actual trade balance, adjusted for inflation, is often smaller than the nominal trade balance. The balance of commodity trade, the difference in the value of imported and exported goods. The balance of trade in services, the difference in the value of imported and exported services. 🔹 Market and Economic Implications This monthly report, although subject to revisions, serves as the basis for calculating net exports in GDP composition. Commodity trade accounts for approximately 75% of the US international trade, with the remainder being service trade 🔹 Release time The disadvantage of this data is the lag in publication time. The statistics for a given month should be released up to six weeks after the end of that month (for example, data for January will only be released in March). The monthly trade balance is simultaneously released in both nominal and inflation adjusted dimensions. In order to better conduct transactions, we have compiled this indicator system as the basic framework for macro analysis in the United States by consulting advanced industry related materials, official websites, and information sources such as Bloomberg. The concept explanation is as follows: 1. Indicator type Leading type, what will happen to the economy? This means that when the macroeconomic situation reverses, relevant economic indicators can be presented in advance. For example, stock market returns are a typical leading indicator, that is, the stock market always tends to decline before the economy declines, and always rises before the economy improves. What's going on with the economy now? Expectations determine action, that is, if companies believe that interest rates will rise, they may change their business behavior now rather than waiting for the actual situation to occur. Non agricultural, industrial output, manufacturing, and trade levels are all common indicators. Lagged type, what has happened to the economy? After economic changes occur, such indicators are often considered to confirm the existence of such changes. 2. Source of indicators Because each publishing institution has detailed technical documentation on their official website. At present, these documents have not been included in this material, but they can significantly improve our understanding and application of relevant indicators, and even help with prediction. Announcing this field is for the convenience of retrieving and querying the original document. 3. Market significance The economic conditions reflected by various economic indicators affect the price performance of various financial instruments through the absolute level and direction of interest rate changes, which in turn affect the economic behavior of residents, enterprises, and governments. For researchers, it is more important that there is a mutually reinforcing relationship between various statistical data, and it is common for one statistical data to be used to predict other related data after it is published. For example, non-agricultural activities are not only related to employment data, but also have a significant impact on the subsequent release of industrial output and personal income. 4. Release time and revisions Some data, often heavyweight data, are initially released based on incomplete information, so not only will they be corrected multiple times, but sometimes the magnitude and span of the correction can be quite considerable. In addition, the release schedule is also very important, which largely determines the "privilege" that the market gives to these data. For example, retail, although it has much less expenditure than individual consumers in terms of statistical scope, attracts greater attention because it was released ten days earlier than PCE. Encouragement together!