Economic Indicators and Their Meanings
In the financial world, various indexes and indicators are used to assess the health and direction of economies. Understanding these metrics is crucial for investors and market participants to make informed decisions.
PMI – Purchasing Managers’ Index
The Purchasing Managers’ Index (PMI) is a monthly survey of private sector companies to gauge economic activity. A reading above 50 indicates growth, while a reading below 50 signals contraction.
ISM – Institute for Supply Management PMI
The Institute for Supply Management (ISM) also releases a PMI index, but it is based on surveys of over 400 purchasing and supply managers in both the manufacturing and non-manufacturing industries.
CPI – Consumer Price Index
The Consumer Price Index (CPI) is an indicator of the changes in prices that consumers pay for retail goods and other items.
PPI – Producer Price Index
The Producer Price Index (PPI) is a collection of indexes that measure the average change in selling prices received by domestic producers of goods and services over time.
PCE Inflation – Personal Consumption Expenditures Price Index
The Personal Consumption Expenditures Price Index (PCE inflation) is one measure of US inflation, tracking the changes in prices of goods and services purchased by consumers throughout the economy.
MSCI – Morgan Stanley Capital International
Morgan Stanley Capital International (MSCI) is an American provider of stock market indexes, equity portfolio analysis tools, and fixed income indices.
VIX – CBOE Volatility Index
The CBOE Volatility Index (VIX) is created by the Chicago Board Options Exchange and shows the market’s expectation of 30-day volatility.
GBI-EM – JP Morgan’s Government Bond Index – Emerging Markets
JP Morgan’s Government Bond Index – Emerging Markets (GBI-EM) is a comprehensive benchmark for emerging market debt, tracking local currency bonds issued by emerging market governments.
EMBI – JP Morgan’s Emerging Market Bond Index
JP Morgan’s Emerging Market Bond Index (EMBI) is an index of dollar-denominated sovereign bonds issued by a selection of emerging market countries.
EMBIG – JP Morgan’s Emerging Market Bond Index Global
JP Morgan’s Emerging Market Bond Index Global (EMBIG) tracks the total returns for traded external debt instruments in emerging markets.
Disclaimer
Please note that the information provided does not constitute personalized investment, financial, legal, or tax advice. This article is not an offer to buy or sell securities, and the statements made are subject to change. Investing in international markets carries risks such as currency fluctuation, economic and political instability, and regulatory risks. Additionally, investing in emerging markets carries increased risks such as heightened volatility, lower trading volume, and less developed legal and accounting systems.