What are all these economic reports?

This is another request for help: please send good crock pot recipes. Everything we make in a crock pot (except for slow-cooked chicken tacos) just turns to a mushy, slop. As someone who eats for substance, I don’t mind them. Jules, on the other hand, has a refined palate. Send recipes. 

Every month, the U.S. government and affiliated agencies churn out a flood of economic reports. They exist for transparency and to give businesses, investors, and policymakers the information needed to make decisions. Big banks, hedge funds, and the Federal Reserve pick them apart to guide policy and strategy.

For retail investors, these reports are good to know but shouldn’t drive investing decisions. If you’re building long-term wealth, the fundamentals of consistent, diverse investing matter far more than trying to time the market on monthly economic noise.

Still, it is fun to know what’s out there. Here are some of the most important reports:

CPI – Consumer Price Index

This is a major inflation indicator. CPI compiles the cost of hundreds of items from hundreds of retailers to gauge the average price of goods in America. It’s reported on a rolling 12-month basis. So if you see “CPI rose to 2.9%,” that means prices increased 2.9% from a year ago, not just from last month.

Importance: B

This gets a high rating because it shows how much you are paying for everyday goods, directly impacting your wallet.

PCE – Personal Consumption Expenditures

This is the inflation measure the Federal Reserve prefers. It’s broader than CPI, covering a wider range of goods and services, and it adjusts for changes in consumer behavior (like switching to cheaper brands). Because the Fed targets 2% inflation using PCE, it often matters more for policy than CPI.

Importance: B+

This gets a higher rating than CPI because it influences Fed policy, which ultimately shapes interest rates, mortgages, and market conditions.

PPI – Producer Price Index

While CPI measures what consumers pay, PPI tracks what businesses pay for raw materials and wholesale goods. It’s often seen as an early signal of where consumer prices might be headed, since higher input costs can trickle down into final goods.

Importance: C+

A medium rating because it indirectly impacts you. If producers face higher costs, they might pass them along, but it doesn’t always translate into higher prices at the store.

Jobs Report – Non farm Payrolls

Released the first Friday of every month, this is one of the most-watched reports. It shows (or tries to?) how many jobs were added or lost in the economy, the unemployment rate, and wage growth. Strong jobs data often signals a healthy economy, but if it’s too strong, it can spook markets into thinking inflation will rise.

Importance: B+

Employment affects wages, spending, and Fed decisions, making it the single most important monthly data point. It doesn’t get an “A” because current collection methods have not been effective since COVID. With revisions expected, the current month’s report is almost less important than revisions to previous month’s data. 

Retail Sales

Measures how much consumers are spending at stores, online, and restaurants. Because consumer spending makes up about two-thirds of U.S. GDP, this report is a powerful indicator of economic health.

Importance: C 

This gets a medium score because it shows the strength of household spending. However, it doesn’t account for spending on credit cards. With shockingly high consumer debt, I don’t get excited with high retail sales. I just think “great, more credit card debt.”

GDP – Gross Domestic Product (Quarterly, with Monthly Updates)

GDP measures the total output of the economy. While the full report is released quarterly, monthly updates (like GDP trackers) keep investors informed. It’s the broadest measure of growth, but also one of the slowest-moving indicators.

Importance: B 

A higher rating because it shows the big picture of growth. 

Beige Book – Federal Reserve District Report

The Beige Book is the ~vibes~ indicator. It is published eight times a year by the Federal Reserve. It compiles anecdotal reports from each of the 12 Federal Reserve Districts about business conditions, employment, wages, and consumer spending. It is compiled through interviews and conversations with various businesses. 

Importance: B-

This gets a medium rating because, while it’s not hard data, it is analyzed by the Fed. It helps fill the gap when the numbers don’t match how everyone feels. 

FOMC Minutes (Federal Reserve)

Not technically a “report” but released monthly. This is the Fed’s meeting notes, which reveal how policymakers are thinking about inflation, jobs, and interest rates. Even the tone of wording can move markets.

Importance: A

The top rating because Fed minutes are straight to the point and account for every report mentioned above. Leave it to a group of economists to not sugar coat their opinions on the direction of the economy. Copy and paste their minutes into your preferred AI BFF to get a quick summary of the direction of the economy. 

The Bottom Line

These reports help shape the narrative of the economy, and professionals watch them closely. But for retail investors, they should be background noise, not the reason you buy or sell. Keep investing and let the economists argue over the decimals.

Debrief on Deck

Next week, we take a look at some awesome investments from professional athletes. We can all thank Cameron for this idea. Thank you, Cameron.

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Until then, stay the course.

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