Consumer Price Index (CPI)
CPI measures how much the prices of goods and services that households buy have changed over a given period. When inflation comes in higher than expected, markets often move quickly on the expectation that a central bank will raise rates or delay cuts; when inflation cools, expectations of rate cuts tend to lift risk assets. It's also worth checking core CPI, which excludes volatile food and energy prices.
Purchasing Managers' Index (PMI)
PMI is a leading indicator built from surveying purchasing managers on new orders, production, employment, and inventories. A reading above 50 signals expansion in that sector, and below 50 signals contraction. Because it's published well before official statistics, markets often lean on it to gauge where the economy is headed, and comparing manufacturing PMI against services PMI shows which part of the economy is strongest or weakest.
Employment indicators (unemployment rate, payrolls)
A low unemployment rate and steady job growth are usually read as signs of healthy household income and spending power. But unusually strong employment data can also worry markets that wage growth will pressure inflation, delaying rate cuts -- while rapidly weakening employment can raise recession fears. This is why employment reports sometimes produce the paradoxical reaction of 'good news being read as bad news.'
GDP growth
GDP growth combines consumption, investment, government spending, and net exports into the broadest single measure of how much an economy has grown. It's published less frequently and revised over time, making it more lagging than other indicators, but it remains foundational to understanding corporate earnings and the overall direction of the stock market. Markets tend to react more to whether growth beat or missed expectations than to the raw number itself.
Consumer sentiment / confidence index
A consumer sentiment (or confidence) index surveys households on how they feel about current and future economic conditions. A reading above a baseline of 100 generally signals optimism, below signals pessimism. Because sentiment doesn't always translate perfectly into actual spending, it's worth comparing against hard data like retail sales.
Leading indicators, and how to read any economic release
A leading economic index combines several forward-looking measures -- stock prices, the yield-curve spread, new orders, and more -- into one composite gauge of where the economy is headed a few months out. Whatever the indicator, markets tend to react more strongly to whether the reading beat or missed the pre-release consensus than to the number itself. This page is general financial education, not investment advice -- always check the current release calendar and figures from your country's official statistics agency and central bank.