Inflation rates
Producer Price Index - PPI (producer price index) estimates the average change in prices determined by producers for their products at all stages of production. Do not include imported goods, services and taxes. Tracking is not a single index value, and change it within a certain period of time. Often, this index is called the index of wholesale prices, because since its inception and until 1978 it was called Wholesales Price Index (WPI). In England it is still published under that name. PPI is used by analysts as an indicator of future inflation. As a rule, the emergence of markets in the index do not respond, but its growth may decline in stock prices and rising profitability of instruments of credit and money markets. More attention should be paid to the core index (CORE), excluding the price of the components of such variables as energy and food prices. This is exemplified when the September 10, 1999 exacerbated the fall of the EURUSD as a result of the publication of the index of producer prices for the U.S. in August, which, though showed a big increase, by 0.5% against 0.2% in July, but the core was set to -0.1% (forecast was +0.1%). The core showed that inflation is not, and have the effect of higher world oil prices.
The index is published each month on the second working Fridays.
The usual range of vibrations - from -0.5% to +0.5%.
Consumer Price Index - CPI (consumer price index) estimates the average change in retail prices of a fixed basket of consumer, except for changes in prices for new products and services.
Includes imported goods, services and taxes. It is assumed that the growth of this indicator reflects the rise in inflation and, therefore, causes a short-term weakening of the currency. Most economists use the CPI as a measure of inflation, and to predict price movements.
The growth of CPI, as a rule, entails
- The fall in stock prices in the stock market;
- Increased rates on the credit market;
- Depreciation of national currencies in the forex market.
Following the publication of May 14, 1999 U.S. consumer price index, which rose by 0.7% in April compared with March, at a meeting of the monetary committee of the Federal Reserve on 18 May, intensified fears of tighter monetary policy (raising interest rates). USDCHF 1.5010-1.4903 and EURUSD 1.0675-1.0743.
This index is published each month on the third working week (Tuesday or Thursday)
In England, called the RPI. Ranged from -0.5% to +0.5%.
The employment
Unemployment Rate (Percentage of unemployed working-age population, in%) determined by a poll of 60.000 households and 375.000 companies. This is one of the key macroeconomic indicators. Used as an indicator of possible inflationary pressures through wage increases. It is believed that the low unemployment wages are growing faster than at high, especially if the expected inflation rate. Characterizes the level of maturity of the business cycle. A good indicator is the level of 5%, while for Germany the normal value - 10%.
The reduction in the unemployment rate lower than 4.5-5% may lead to an increase in the federal credit interest rates, which in turn will lead to a decrease in stock prices and increase profitability of the credit market instruments. Published the first working Friday of every month. Nonfarm Payrolls (number of employees, defined by the payroll, except for agricultural workers); Average Workweek (average working week in hours); Average Hourly Earnings (Average hourly earnings in USD); Employment Cost Index (Index of wage in %). These indicators are used as a decisive argument in determining the level of inflation, and hence the possibility of changes in credit interest rates. For example, September 2, 1999, a sharp fall in the dollar against the Swiss franc from 1.5350 to 1.4881, as published overpriced economic data for the second quarter productivity growth from 1.3% to 0.6% and labor costs from 3.8% to 4.5% of annual growth, which is an omen of inflation. But the next day, the U.S. unemployment data for August eased expectations of higher interest rates in the near future FED number of new jobs grew by 124 thousand against 310 thousand in July, the unemployment rate fell from 4.3% to 4.2%, while average hourly earnings rose only 0.2%, lower than the expected 0.4% and lower than the previous month's 0.5%. Through this campaign, and partly restored U.S. government bonds, and with them, and the dollar.
