An economic calendar is a list of events that will take place that can impact the economy of a country or even the world. Published by governments and organizations, it shows when reports and meetings on key economic occurrences are released or take place. Thus, investors can use them to inform their predictions about forthcoming changes. Below, we give the key events on an economic calendar.
Employment
One key announcement that will be posted on economic calendars is a country’s employment figures. This helps judge the strength of an economy. If more people are at work, it shows that more production is taking place. More production leads to an increased and robust GDP, which in turn spurs investor confidence.
The opposite is also true. High unemployment shows that a country is not operating at full capacity. When more people are unemployed, they also have less money to purchase goods, damaging retail sales and purchasing levels in their own country. In extreme cases, this can lead to even more problems. Social unrest may become high, leading to striking action, for example. In some cases, political instability may ensue. None of this is likely to attract investors and may dissuade people from working with companies that operate in these countries.
House Price Index
The house price index is of particular importance for those who invest in property. It shows the increase or decrease in house prices by a percentage from one given date to another. In the US, this is generally done quarterly, though other countries may do it more or less frequently.
It is useful for investors for several reasons. Lots of housing sales show a buoyant economy, with people moving up the economic ladder. When interest rates are high, and the economy slows, people buy fewer houses, and thus their prices drop. All of this can be used to predict long- and short-term investment opportunities. Anyone thinking of buying could check the economic calendar this week for details of the market in their country. Websites hosting such calendars are often designed specifically with traders in mind to support their decision-making processes by collating the latest news and insight. However, they could also help individuals make an informed decision regarding the right time to take out a mortgage.
Retail Sales
Retail is a term used to describe the sector that includes shops and businesses that sell goods. They are a good economic indicator, as they are essentially measuring consumer demand for products and goods. Defined by durable and non-durable goods, they are reported each month and can show any inflationary pressures that may exist.
These “macroeconomic indicators,” which reflect the current economic status of a country, are used by analysts to then predict the future health of an economy. In short, when an economy is strong and has plenty of business taking place, more goods are purchased to assist this process. When people are employed, they also have a higher level of disposable income and can buy more luxury retail items. This can be great for shareholders in retail companies, as it means increased profits and dividends. Usually, when retail sales decrease, inflation decreases with it. This can make investors look to other options, such as bonds.
By no means are these the only events on an economic calendar. However, by taking note of them, you can use them to inform your investment decisions making a more balanced decision.
