Payday, Loans, finances

Even when there is public concern over the state of the economy, the market does not react in a similar way to all economic data. Some reports seem to be more important than others, and the market appears to focus on one report at a time. The most significant data seem to be unemployment and the Consumer Price Index (CP1). During a period of sustained low unemployment, as seen in 1997, even a modest increase will not cause much concern. A jump in the CPI, however, will always warn the market to expect a preemptive strike by the Fed, cutting off potential inflation by nudging rates up slightly. The Trade Balance report was particularly popular in the late 1980s when the deficit with japan seemed to be at the root of the U.S. deficit. Sagging U.S. exports and overconsumption of foreign-made products by Americans looked as though the U.S. work force could not compete in the world market.
Other reports can also attract the attention of traders, but may be more difficult to interpret. Durable goods, retail sales, budget, and tax legislation all directly affect the economy and prices; however, it is not always clear how to relate the changes in durable goods orders with price change, or how the latest news on tax law will contribute to the economic well-being. More important, it is difficult to assess how the government will manipulate interest rates in reaction to these data.