 Okay guys, we're back to the second part of this economic data video series, the two video video series. In the first video, which I'll link to here, we covered earnings, we covered CPI and PPI, we looked at retail sales and consumer sentiment as well as GDP. It just is a quick recap, obviously we have earnings season or you know the time when companies report their earnings four times a year, right? So it's split up according to how many quarters there are in a year and of course there are four quarters, CPI is reported differently and monthly but it is sometimes compared monthly and it's sometimes compared quarterly as well as yearly so you have to be careful when you're comparing numbers because a lot of times people get tripped up about CPI on a month to month basis which is a much smaller number obviously compared to on a quarterly or more importantly on a yearly basis. And then retail sales, well that's pretty straightforward I believe as well as consumer sentiment, right? So if the consumer is feeling good and remember US economy is very consumer based as a difference as compared to the Chinese economy for example which is more manufacturing based. So as consumer sentiment goes up, then obviously that means that people are more willing to spend and of course that gets reflected as well in the retail sales and there are certain retail beacons or benchmarks if you will which are you know the big retailers. And then there's GDP which was a little bit more complicated also reported on a yearly monthly and quarterly basis. Again like the CPI you have to be careful make sure that you are comparing month to month to quarter to quarter or year to year because the numbers vary. Obviously US GDP number yearly growth which is basically the yearly growth, GDP growth of a country who is you know in a growth and expansion phase or a very healthy economy is usually around 5, 6%. We saw China you know going nuts around 9, 10 I believe even 11% at some point but that was in their exponential growth phase a couple of years ago I think. But now they're down to 5 or 6 of course they're in a recession and US is somewhere around 4 or 5%. So make sure that's on a yearly basis right if you compare it on a quarterly basis that number is going to be smaller so again like the CPI be careful what you are comparing so you don't get tripped up on monthly or yearly comparisons. And today we're going to cover basically the labor market as seen by a few indicators jobless claims, ADP and payrolls. We're going to look at the dollar which I have no idea why I think this was just a typo in the previous video that I made not that familiar with Keynote so I won't waste time trying to figure out how to believe it's format style. Now I don't know where it is, here we go this should be it, yep there we go dollar we're going to look at the labor market the dollar which is very related to yields and oil and we're going to look at mortgage apps. Okay so let's get started jobless claims let's switch over to TradingEconomics.com which is the calendar that I use in the first part in the first video and as mentioned there is the actual the previous consensus in forecast so the forecast is whatever was forecast to happen and then the previous is the previous either month or year and as I mentioned you know when you are comparing make sure that you're comparing apples to apples if you're comparing average hourly earnings make sure that you're looking at month on month or year on year right or quarter on quarter okay and that same the same goes for GDP for example so here we have a GDP quarter on quarter okay so GDP quarter on quarter for example and this is for Canada was the previous was 0.6 percent and the forecast was 0.1 percent so you can see that's a much smaller number because that is quarter on quarter if you were to look at the GDP month-to-month it would be much larger I mean sorry year-to-year it would be much larger number and if you look at it month-to-month it's also much smaller so it makes sense right okay so Friday which is today September 1st is right here okay and so you go through and you look at the little flags here and you pick the ones that you are interested in in case that you're only looking at US the US markets or your US economy then this is what you want to look at so there's three data points that are reported that are related to the labor market the first one is a non-farm payrolls the second one is unemployment rate and a third one is payrolls well that's the private one but well the third one is actually average hourly earnings or that has to do with you know inflation in the labor market per se so how much did hourly earnings go up or down in that case so let's go ahead and look at the basically these two which are the probably probably the most looked at the unemployment rate means what percentage of the active labor force is actually unemployed we have a definition here from investing.com so the unemployment rate as I mentioned measures the percentage of total workforce that is unemployed and actively actively seeking okay so this is there's the universe of the population of the United States and then out of that population there are quite a few people who are not part of the workforce which means that they are not part of the active workforce such as I don't know the exact you know politics or thresholds in the US economy but obviously younger people kids are not going to be considered part of the labor force so in the US it might be either below 18 or below 21 you're not considered part of the active labor force and again after retirement after a certain age you're also not considered part of the active labor force of course it wouldn't make sense to count those people as unemployed because it would inflate the unemployment rate right so basically on both ends of the curve you chop off the people who wouldn't normally be employed and the rest is considered the total workforce or the active labor force so we have a chart here for I believe it's five years yeah okay so you can see here at 2020 obviously there was a big jump in unemployment this is the unemployment rate which has been successfully brought back down to more normal levels so this makes should make a lot of sense because it means that 14 15 16% of the labor force was unemployed right because there were a lot of jobs lost after the pandemic and during the pandemic and then after the pandemic was basically you know it's under some sort of control right then we started to see people get it going back getting hired and the unemployment rate going down as you can clearly see on this chart the the amount of jobless claims is usually reported as the number of people who claimed unemployment insurance for the first time so it is obviously directly related to the unemployment rate because if unemployment claims go up then that means that the unemployment rate itself will obviously go up as well okay so this is the number of unemployment claims filed on a monthly basis and this is a bad it's usually around 180 maybe 200,000 150,000 a month as you can see quite the big jump up right on March 2020 you can see that there were 3 million and then almost 7 million on a monthly basis as compared to 200 or 300,000 on a monthly basis before the pandemic and then it has slowly dropped back down and this is only up to 2020 it is a lot better now and see if we can find it here the unemployment claims okay not here maybe it's on a different day so that is the difference between the unemployment rate and the initial jobless claims as it is sometimes called or the jobless claims which is people claiming unemployment insurance because they have lost their job okay they are indirectly related but they are indeed related and then there's the payrolls number the payrolls number is the number of jobs added okay and then and there's non-farm payrolls right coming back over here there's non-farm payrolls which is basically everybody that is not a farm you know directly or indirectly employed farm worker so you have goods and service companies all reporting and then you have you know if you want to look at a little bit more specific or finer details you have actual government payrolls which is the public sector right so all obviously all of those indicators have to do with the labor market and they can be very powerful in moving markets because remember the Federal Reserve's double mandate as it is called is to control prices basically they have to maintain price stability in the market in the economy so they have to control prices make sure that prices don't go out of whack either to the upside or to the downside is obviously a bad thing so they control basically inflation which is why CPI and PPI are so important but the second mandate of the Federal Reserve is to actually maintain a healthy labor market right so you have you have them always looking out for the employment rate or the unemployment rate actually and unfortunately that sometimes means that they have to do something to cool the economy by making sure that you know companies don't grow as much or don't increase their prices as much which means that that sometimes affects the labor force and it increases the unemployment rate so you can find videos of Fed Powell and other feds in the past you know talking to Congress or the Senate about how it's it sounds like a horrible thing that one of their mandates is to actually control the employment rate right and if there's too much employment that's gonna drive labor prices up which is gonna drive which is gonna be problematic because it's gonna drive goods and services prices up which is gonna defect the economy in a negative way so that is the relevance of jobless claims and the ADP the ADP payrolls is the private payrolls the dollar okay let's jump over to the dollar and let me see if I can find I think finance yahoo.com yeah this might work you'll usually find it as a ticker symbol DXY right and what it does is it but sometimes you have to add the dollar sign in front of it just to make sure and it depends let me see okay not on yahoo finance that's something else so let's try DXY no so let's just try a dollar index okay but basically that is what it is it's a dollar index here it is the dollar index cash and here it is right so this is one day let me jump back to five years and then we'll take a look at the yeah the logic oh sorry about that okay so what is the logic behind this so the dollar was you know basically just trading along 18 19 20 and in the in 2020 which is right around here see yeah this is 19 this is March 20 right here as you can see it drops why does the dollar drop on the pandemic well the dollar is actually just another product and if trading is gonna be halted and you know international trade is halted and economies are basically ground to a halt because of this pandemic then there's a lot less trading if there's a lot less trading that means that a lot less company or countries need dollars because they don't need to pay for their dollar for their US imports by using dollars this is something it's actually quite simple but if you there's two countries and they're they trade if they let like US and China they trade which means US exports to China and China exports to the US so China is basically buying dollars in order to pay for whatever they buy from the US and by the same token the US has to buy Yuan in order to buy Chinese goods well the US dollar is one of the most widely traded currencies because the US exports so much that a lot of countries need to buy dollars in order to buy things from the US so every time there's a lot of US exports sorry yeah if there are a lot of US exports then a lot of countries are gonna be wanting to buy the dollar right in order to pay for US goods but if the US economy stops exporting because of the pandemic for example then there's not that much trade going on where countries are buying US dollars in order to pay for US goods so the value of the dollar drops when those economies are reactivated then it rockets back up because a lot of countries are now scrambling to buy dollars to buy the US goods that they now need because their economies are now back or they have reopened right and then the US dollar has an extra added weight to this because not only do they trade you know not only is international trade handled well US exports handled in dollars but also US I mean oil international oil trade is in dollars okay because of an agreement you know made a long time ago which is kind of falling apart now that all oil be traded in dollars in certain you know certain oil producing countries which are the biggest oil producing countries of course that is kind of falling apart with the bricks if you've heard of it and but after it rocketed back up you can see now clearly that back in 2023 or now in 2023 that dollar has began to stabilize right now here's the thing dollar is important because when it goes up right when the dollar goes up that means that the dollar is very strong and if it is very strong then it also it usually reflects the strength of the economy as well if the economy is doing good that usually means that a lot of countries and foreign companies are going to want to buy dollars not just for buying goods from the US but also to invest and what is what are some of some of the you know three of the top investment vehicles in any country the stock market of that country the bond market of that country and the real estate market of that country so out of those three the most stable is the bond market right the sovereign bonds or the government bonds are considered the safest why because stocks in a stock market can go up and down they companies can go bankrupt right real estate can go up and down and crash as we have clearly seen in the past in the recent past so out of those the government backed securities are the ones that are the safest and they're sought out quite a bit by a lot of not just foreign companies but also foreign countries they buy each other's debt China owns a whole bunch of US debt through bonds that they buy right and the reason they buy bonds is because when you buy a bond you give that company money and that money pays you you know monthly yearly whatever interest rates back for having given them that amount of money in a bond a bond is basically a loan so because the the dollar is used for trade then obviously it gets driven up because the dollar is used for oil trade the dollar gets driven up and when it does it means it has it should mean that the country's economy is quite strong which means that companies in other countries and other countries themselves are going to want to buy debt in that country because their economy is doing good that means that they're solid on their you know their their forecast and it means that they will not default on their payments so government debt becomes very attractive as the most attractive out of those three investment vehicles so when the dollar goes up stocks go down which is what you'll hear very often and the reason is would you rather invest in a stock that might or might not give you 10 15 20% or would you rather invest on in a company in a country sorry that is giving you basically risk-free debt because there is no risk of it collapsing there is no risk of their of the country defaulting on their payments but they're giving you five six seven percent return well obviously a seven seven percent return which is also risk free is is very you know very attractive compared to a 20% return which might or might not be there you know it might be there it might go negative you don't really know so when the dollar goes up right then equities look less attractive which is that's basically what happens they look less attractive and therefore they the stocks go down right because people pull money out of the stock market and they stick it into bonds and that is a again also related to yields right so what do what are yields these are basically government bond yields okay and think about this if you have a government bond which is paying seven percent then a lot of people are gonna want to buy it right and the thing is if yields go up then the value of the bond goes down if yields go down again the value of the bond goes up they are inversely related right so if yields are going up then that is making bonds very very attractive to to investors so as yields go up they would rather invest in bonds right then invest in inequities because yields these are bond yields just to clear up oops these are bond yields there so as bond yields go up then investors would much rather put their money on a safer investment such as government bonds then put their money into the stock market or equities so that is basically dollar and yields going up is bad for stocks right and so you'll see that and you'll usually when you're trading you should keep an eye on the dollar index and you should keep an eye on certain things such as the TNX for example the 10-year government yield and there's you know there's the two year there's 30 year and there's many many other ones but the two the five the 10 and the 30 year probably the ones most looked at and out of those the 10 is probably one of the more looked at ones okay and then oil of course you know the thing with oil is as oil goes up then it makes it more expensive to to run the economy because you know companies are obviously affected by oil and as oil goes up it means that oops five years right so here it drops because the economies come to a stall they stall you know they come to a halt so you know people aren't buying oil and then as soon as your recovery you know starts back up again then the price of oil goes back up right and now we've stabilized and we don't know what oil is going to be doing obviously the economies of different countries are not the only thing that drive oil prices there's also production cuts so when they cut production rates then obviously oil becomes more scarce and therefore the prices go up when a recession is is looming then the prices of oil go down when there's a war the prices of oil jump because a there's a forecast scarcity of oil in the market in the futures to come and and the last one is mortgage apps and I believe that they have I think they reported this so what does mortgages have to do with I think this is only for Friday which is okay it's not giving me the previous days because they already passed you see I think I can still get it if I just say this week there we go okay so there's yeah so mortgage apps was somewhere in here here you can see the auctions right the five-year note auction or government bond auction here you can see housing prices which is obviously important the jolts the the stocks the U.S. oil stocks are important you know because if oil stocks go up or down the reserves go up or down then it's obviously cause for concern oh well actually if it goes down and here are the mortgage apps so here are the mortgage refinance index so base basically what this is telling us is that you know what this one in particular the mortgage rate is telling us what the mortgage rate is which is incredibly high now at 7.31 I think I heard somebody on discord the other day typing or I read him typing that he works for a mortgage company and they have seen as high as 8% recently in the past week of August so the last week of August so you know there you go but then you also have mortgage apps the mortgage app because how many people applied for you know for mortgages and that obviously has to do with the state of the economy because if you know you have seven or eight percent mortgage rates then obviously mortgage apps are not going to be high they're going to be low they're going to be negative they're going to go down and and and that kind of gives you an idea of what's going on in that third investment market that I talked to you about the real estate market because it as mortgage apps go up it means that you know the state of the the state of the consumer is positive you know you should see positive consumer sentiment or increasing or improving consumer sentiment whereas if you see mortgage apps go down it means that the consumer is so tight that they're not buying any homes and that is you know generally bad for the overall economy because if the consumer is so bad off that it can even buy a home you know it'd be a different story if we're talking about discretionary items like you know a car or you know luxury items but if you're not even able to buy a home then that's you know that's a pretty telling sign that the economy is not doing very well so those are in a nutshell the 10 most important econ macroeconomic indicators that we usually look out for when we're trading and to tie this back into the whole think script video series that we're looking up at over here this kind of information is information that you can have pop up if you're using the think resumed platform you can have it pop up and we were learning how to code these things we're learning how to code scripts that give us information in a column form scripts that give us information on a chart scripts that give us information on some sort of a grid layout or a study that's underneath charts and especially on charts this is the kind of data which is very helpful because if you're looking if you're trading Tesla then you're probably going to want to look at something like let me see well yeah the DXY or GDP in general or consumer sentiment would probably be one of you know a very important one but you would probably want to look out for example for CPI auto and cars specifically you know if you're trading Walmart then you'll probably want to look at retail sales and consumer sentiment if you're trading oil I don't know if any of you trade oil but if you're looking at trading oil or or retail or some of the more like consumer staples you probably want to look at GDP but these are pieces of information that can show up on any chart so such as if you're trading you know a particular ticker that is related to the real estate market the oil market you know the dollar the yields you know or particular earnings report you know the EPS the previous EPS we have an EPS historic EPS script or think script coming up in one of the future videos then you want to make sure that you're able to see you know these these these data points on your chart as your trading you know because it keeps you up to date it keeps you informed so I hope you you know that this sort of very quick and rough explanation of these economic indicators was clear enough if it wasn't please go ahead and drop comments I will answer all your questions and I hope you enjoyed this video don't forget to subscribe to the YouTube channel and don't 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