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Helping-Advisors

by Russell Investments

Economic Indicators Dashboard

What's the state of the economy?

Posted: 10/01/2014
(Originally published: March 2, 2009. Indicators most recently revised June 19, 2014.)
Updated daily to capture previous month-end values as they become available.

To help you talk to your clients, we've identified a few key economic and market indicators to help assess the current economic health and trend.

New Update: In June 2014 we updated the dashboard with new indicators.

For a more detailed description and updated commentary on the new Economic Indicators Dashboard see the Helping Advisors blog.

  • MOST RECENT
  • 3-MO. TREND
  • TYPICAL RANGE
  • ACTUAL RANGE
How do I read this chart?

Market Volatility (CBOE VIX)

The Chicago Board Options Exchange Volatility Index (CBOE VIX) measures annualized implied volatility and is considered by many to be the prime barometer of investor sentiment and market volatility.

Lowest recorded month-end value occured on 11/30/2006

Highest recorded month-end value occured on 11/28/2008

10.79 62.25 Typical 13.40

+/- 1 standard deviation of historical Market Volatility ranged between 12.40 and 27.95.

As of 09/30/2014, within typical.

10 Yr. U.S. Treasury Yield

The average interest rate on the 10 year Treasury Note issued by the U.S. Government.

Lowest recorded month-end value occured on 07/31/2012

Highest recorded month-end value occured on 09/30/1981

1.47 15.84 Typical 2.49

+/- 1 standard deviation of historical 10 Yr. U.S. Treasury Yield ranged between 3.31 and 8.89.

As of 09/30/2014, trending away from typical.

Yield Spread

The spread between 3 month Treasury bill yield and 10 year Treasury note yield measures the market's outlook for future interest rates.

Lowest recorded month-end value occured on 01/30/1981

Highest recorded month-end value occured on 08/31/1982

-1.91 4.39 Typical 2.47

+/- 1 standard deviation of historical Yield Spread ranged between 0.28 and 2.66.

As of 09/30/2014, within typical.

Home Prices (HPI)

The S&P/Case-Shiller Home Price Index is the leading measurement of U.S. residential real estate prices, tracking changes in top 20 metropolitan regions. This indicator value represents the trailing year over year % change in the home prices index as of last month-end.

Lowest recorded month-end value occured on 01/30/2009

Highest recorded month-end value occured on 08/31/2004

-19.01 17.12 Typical 6.75

+/- 1 standard deviation of historical Home Prices ranged between -6.69 and 13.96.

As of 07/31/2014, within typical.

▲ MARKET INDICATORS


▼ ECONOMIC INDICATORS

Inflation (CPI)

The Consumer Price Index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households. The CPI is defined by the Bureau of Labor Statistics as a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. This indicator value represents the trailing year over year % change in the CPI index as of last month-end.

Lowest recorded month-end value occured on 08/31/1949

Highest recorded month-end value occured on 03/31/1980

-2.99 14.59 Typical 1.71

+/- 1 standard deviation of historical Inflation ranged between 0.69 and 6.63.

As of 08/29/2014, within typical.

Unemployment

The Bureau of Labor Statistics measures employment and unemployment of all persons over the age of 15 using two different labor force surveys conducted by the United States Census Bureau (within the United States Department of Commerce) and the Bureau of Labor Statistics (within the United States Department of Labor) that gather employment statistics monthly.

Lowest recorded month-end value occured on 06/30/1953

Highest recorded month-end value occured on 12/31/1982

2.50 10.80 Typical 6.10

+/- 1 standard deviation of historical Unemployment ranged between 4.16 and 7.50.

As of 08/29/2014, within typical.

Economic Expansion (GDP)

Gross Domestic Product (GDP) measures the total market value of a nation's output of goods and services during a specific time period. It is measured on a quarterly basis.This indicator value represents the trailing year over year % change as of last month-end.

Lowest recorded month-end value occured on 03/31/1958

Highest recorded month-end value occured on 03/31/1950

-10.00 16.90 Typical 4.60

+/- 1 standard deviation of historical Economic Expansion ranged between -0.69 and 7.26.

As of 06/30/2014, within typical.

Consumer Sentiment (CSI)

The University of Michigan Survey of Consumer Sentiment Index is an economic indicator which measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes affect their economic decisions, such as spending activity, and therefore serves as one of the key indicators for the overall shape of the economy.

Lowest recorded month-end value occured on 05/30/1980

Highest recorded month-end value occured on 01/31/2000

51.70 112.00 Typical 84.60

+/- 1 standard deviation of historical Consumer Sentiment ranged between 72.03 and 98.25.

As of 09/30/2014, within typical.

How do I read this chart?

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This dashboard is intended as a tool to set context and perspective when evaluating the current state of the economy.

For each indicator, the horizontal bar shows four things.

  • A blue color band represents the typical range for this indicator. +/- 1 standard deviation of historical values for the indicator fall in this range.

  • An orange marker shows the most recent value – the closer the marker is to the blue bar, the closer it is to historically typical conditions.

  • A grey area outside of the blue band which shows the range actual conditions.

  • An arrow shows the most recent three-month trend indicating if it is moving toward or away from the typical range.

Data Source: FactSet

Frequently Asked Questions

What does the dashboard tell me?

  • The dashboard offers a snapshot of current U.S. economic and market conditions, based on key economic and market indicators. The dashboard contextualizes the current reading of each indicator by comparing them to their typical, historical ranges of month-end values.

Can I use the dashboard as a forecasting tool?

  • No. The dashboard is not meant to serve as a direct prediction regarding the future performance of any economic or financial market. It is not intended to predict or guarantee future investment performance of any sort or serve as a market timing tool. Instead, the dashboard is intended to provide advisors with context and perspective about the current state of the economy.

What defines typical?

  • The dashboard definition of "typical range" is +/- 1 standard deviation* away from the mean of all historical month-end values, or 68% of historical values.1
  • The typical ranges are based on historical month-end data. Since each data point reports data at a different time, each typical range is calculated independently using data through the end of the previous month. Revised ranges are usually published during the first quarter of the year, whenever an indicator reports data for a new year, or whenever there are revisions to historical data.

How should I interpret the chart?

  • The charts show the relationship between the most recent values and their typical historical range.
  • Blue color band: represents the typical range (one standard deviation from the mean, i.e. 68% of all historical observations) Indicates more typical behavior for that indicator. If it lies outside, that points to extreme behavior.
  • Arrow: shows the most recent three-month trend.
  • A grey bar: shows the full range of historical values for each indicator. The lowest recorded value is shown on the left side of the bar and the highest recorded value on the right side of the bar.
  • Orange marker: represents the current reading.

Why are these indicators important?

  • In order to monitor the current health of the economy and its trend, we believe it's important to keep an eye on both the broad economy as well as key indicators in the market.
  • More information about each of these indicators is available by following the “historical details” links on the left side of the dashboard.

How often is the dashboard updated?

  • The dashboard shows the most recent month end values for each indicator. It is updated periodically to capture previous month-end or quarter-end values as they become available. Additionally any revisions to the historical data will be captured with each update.
  • Each indicator reports month-end data with the exception of GDP, which is reported quarterly.
  • While some of the indicators may be measured daily, we choose to include only the monthly/quarterly numbers, as they are better indicators of the overall economic trend.
  • With each update revisions to the historical data may occur.

How can I use the dashboard to talk to my clients?

  • You can use the dashboard to show your clients how the current market and economy, based on these indicators, compare to historically typical conditions and to show them which direction the market and economy seem to be moving.