The comprehensive MBSQuoteline Glossary gives you simple definitions for tough market issues and economic jargon. Impress your clients with insight into economic reports, including where they come from, what they are, when they come out and, most importantly, why they matter. What is PCE and why does the Fed watch it so closely? What is the "roll" and how does it affect pricing? What are indirect bidders in a Treasury auction and how do they affect interest rates? Learn answers to these questions and more.
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Demo based on market events from: Tuesday June 2, 2015
ADP Employment Change
The ADP National Employment ReportĀ® is a measure of nonfarm private employment, based on a subset of aggregated and anonymous payroll data that represents approximately 392,000 of ADP's 500,000 U.S. business clients and roughly 24 million employees working in all 19 of the major North American Industrial Classification (NAICS) private industrial sectors. The ADP National Employment Report was developed to help meet the need for additional timely and accurate estimates of short-term movements in the national labor market among economists, financial professionals, and government policy-makers. Because ADP pays 1-in-6 private sector employees in the United States every pay period across a broad range of industries, firm sizes, and geographies, it has a unique and significant perspective on the U.S. labor market.
Chicago PMI
Who: Chicago arm of the National Association of Purchasing Managers
When: Last day of the month for the current month
What: The Chicago PMI is measured by new orders, production, supplier deliveries, inventories and employment; asking for positive, negative or unchanged readings of each. A reading above 50% generally indicates that the manufacturing sector is expanding, and below 50% signifies contraction. The Chicago Purchasing Managers Index is measured like the ISM (Institute for Supply Management) and has a 91% correlation with the national ISM.
Why: Manufacturing is an important sector of the economy and the Chicago PMI is one of the two primary national measures (the ISM is the other). It is looked at as a good indicator for future inflationary pressures and can have a big effect on the markets. Changes in prices paid by manufacturers can be indicative of accelerating or decelerating inflation and future manufacturing activity can be predicted by changes in new orders. Strength in the manufacturing sector may be a sign of a strong economy and is usually negative for bond markets.