Frequently Asked Question
I am often asked about the indicators that I follow to frame my understanding of the economy and especially the labor market. I thought I would share a few of them with you. To get an overall sense of the economy’s performance these indexes really help:
1. Economic Outlook Index: Prepared by USA TODAY/IHS Global Insight , combines eleven economic and financial indicators to predict future growth or decline in GDP. Right the index shows the economy growing at 1.3% through the end of the year.
2. Consumer Confidence Index: Prepared by the Conference Board measures the degree of optimism among consumers about the economy and their personal finances.
3. Consumer Sentiment Index: Prepared by the University of Michigan which is similar to the CCI but has been used since the 1940s and is indexed to 1964.
4. Manufacturing Index: Prepared by the Institute for Supply Management follows how the manufacturing sector is doing in terms of production. Currently Index indicates a very modest growth in the sector.
5. Small Business Confidence Index: By the Small Business Research Board measures confidence among small business owners.
When it comes to actual employment the indicators lag so far behind that it is hard to figure out what is going on, but try these:
6. Bureau of Labor Statistics’ Table B-1: Which provides year over year employment numbers by economic sector, plus last three months of job growth or decline.
7. Manpower: Produces quarterly reports on the number of temporary hires that includes types of position and regional information. Often their activity becomes a precursor to full-time hiring.
There are many others to consider as well, but these always grab my attention. The problem with all indicators at the present is that they are built around the business cycle but what has occurred is a restructuring of the economy from production to network which possibly alters how the indicators interact, especially with labor markets.