Trading Futures | Economic Indicators

This is a monthly survey of UK purchasing managers that measures their views on the business outlook in the services sector.

The responses recorded by the survey are used to compile an index, the headline figure of which lies between 1 and 100, indicating growth above a figure of 50, but contraction beneath 50 (50 represents the so called 'boom-bust' line).

The services industry represents a significant portion of the UK's GDP and gives some clues as to the health of the economy as a whole. A higher PMI Services level indicates that purchasing managers anticipate higher levels of purchasing, and therefore greater spending by businesses and growth in the economy.

The impact of the report is limited by the fact that the services sector tends to make consistent and predictable contributions to the economy.

The analysts polled by Bloomberg showed a median forecast of 55.6, the same as last month's figure.

This is a monthly survey of UK purchasing managers that measures their views on the business outlook in the services sector.

The responses recorded by the survey are used to compile an index, the headline figure of which lies between 1 and 100, indicating growth above a figure of 50, but contraction beneath 50 (50 represents the so called 'boom-bust' line).

The services industry represents a significant portion of the UK's GDP and gives some clues as to the health of the economy as a whole. A higher PMI Services level indicates that purchasing managers anticipate higher levels of purchasing, and therefore greater spending by businesses and growth in the economy.

The impact of the report is limited by the fact that the services sector tends to make consistent and predictable contributions to the economy.

The analysts polled by Bloomberg showed a median forecast of 52.9, as compared with last month's figure of 53.1.

A measure of the combined value of all goods and services sold in the month at retail venues throughout the UK.

The report gives clues of both consumer confidence and consumer spending. If sales are high, it follows that spending is also high, and that consumer confidence is likely to be high as well.

Higher consumption should spur economic expansion, but may also fuel price rises. An overheating economy runs the risk of high inflation.

The headline is the monthly percentage change in Retail Sales.

Based on a Bloomberg survey of economists, Retail Sales are expected at 0.2% (MoM). This is in comparison to 0.0% last month.

It is the monthly change in the number of paid part-time or full-time workers in the US, excluding the farming sector.

Non-farm Payrolls is one of the most closely watched US indicators and is considered one of the best gauges of US job creation. Labour is massively important to the US economy, and accordingly the Fed may be influenced by the figures in this report: if the number of jobs being created is high, it can point to inflationary pressures (which the Fed may need to counter with a rate hike), whereas declines in the number may indicate a slowing or contracting economy, which increases the chances of a rate cut.

If the figure diverges from expectations, it can lead to large amounts of volatility in dollar exchange rates, as well as in the price of bonds and the level of stock indices.

A Bloomberg survey of analysts yielded a median estimate of -100,000 compared to a previous figure of -131,000.

The percentage of people registered as unemployed in the US, calculated by dividing the number of employed by the total work force.

Unemployed individuals are defined as being those able and willing to work who have actively sought employment within the last four weeks. The total work force is calculated as the sum of all those employed and unemployed who are 16 years and over.

Gives a good picture of the labour environment in the US, and therefore provides insight into production, consumption and earnings.

A lower figure suggests increased expenditure from an overall greater amount of wages, which may lead to economic growth as well as inflationary pressures. High unemployment rates, on the other hand, implies economic weakness, lower consumer spending power, etc.

The median figure from a Bloomberg survey of analysts was a rate of 9.60%, as compared with last month's figure of 9.50%.

A measure of the change in average rates of pay; the figure is reported as a percentage change from both the previous month and the previous year, with the month on month figure providing the more useful glimpse of the two into short-term changes in employees' spending potential.

The figure provides information about how much disposable income workers have in the US and therefore provides additional information about inflation. A high figure indicates that employees have money to spend, which is likely to suggest the danger of rising inflation.

Economists surveyed by Bloomberg yielded a median figure of 0.1%. Last month's figure showed a figure of 0.2%. The year on year figure predicted was 1.6% from 1.8% previously.

It is the average number of hours worked in the non-farm sector.

It is an indication of the tightness of labour markets and labour cost inflation. When setting rates, this economic indicator bears an influence on the Fed's decision. A high reading is desirable as this is bullish for the dollar.

Predictions from a Bloomberg survey of analysts show 34.2, which is the same as the previous figure.

This evaluates the state of the non-manufacturing sector by surveying a number of purchasing and supply managers.

The index is compiled by taking the responses and applying a weighting according to how much of a contribution the relevant industry contributes to GDP.

The index is calculated using 50% as representing the midpoint between negative and positive expectations.

The report includes an index for each of 10 areas: Business Activity, New Orders, Supplier Deliveries, Employment, Inventories, Prices, Backlog of Orders, New Export Orders, Imports, and Inventory Sentiment.

Of these, Business Activity is considered to be the most important.

Non-manufacturing businesses contribute a major portion of the US GDP, but at the same time, non-manufacturing data tends to be cyclical and much more predictable than manufacturing data. In other words, non-manufacturing data is responsible for little of the volatility in GDP.

Non-manufacturing industries do comprise a significant part of the CPI and as a consequence, non-manufacturing data can give insights into inflationary pressures.

Analysts surveyed by Bloomberg indicated a median expectation of 53.2, compared with last month's level of 54.3.