5 economic indicators that I focus on as an investor

1. Jobs Report

Why: The North Star for me is that my companies should be delivering strong results if people are employed, making money, and spending their money on goods & services that my company provides. Low unemployment, strong job creation, and a tight labor market quickly signals to me my companies should continue to do well with a firm economy.

2. Jobless Claims

Why: I really like to get a weekly Thursday update on how many people are filing for unemployment so I can get timely & high-frequency update on how the labor market is doing. A strong labor market is very important so my companies can sustain demand and deliver strong results.

3. Materials released from the Federal Reserve like FOMC Projections, FOMC Minutes, FOMC Announcement, and Fed Chair Press Conference

Why: They're professional economists, have more resources, and connections than I do to understand how the economy is doing & where it's going. I learn a lot from their expertise and try to make sure I'm on the same page on my understanding of the economy so I know where monetary policy and interest rates are going.

4. Inflation

Why: The Federal Reserve looks at inflation to determine if interest rates should go up or down. If inflation is too high, the Federal Reserve will increase interest rates, tighten monetary policy, and will negatively impact stock prices regardless of how well my companies perform.

5. GDP from the Atlanta Fed

Why: Strong business activity in a country translates to higher profits for my companies. It's an important metric as an investor for that reason, but low on my list because GDP released from the BEA isn't timely at all (it's released quarterly), I'm already making decisions as an investor way after this is released, and there are a lot of noisy components that affects the headline number that has no impact on my companies. That's why I like to see the real-time GDP forecast from the Atlanta Fed since their model is built similarly to how GDP is measured and the model really helps me understand how numerous data points that are released over time will impact GDP like home sales, manufacturing indexes, and other data points that are tough to make investment decisions on their own.

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