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FOREX TRADING COURSE FOR BEGINNERS

6. Unemployment Rate

In simple terms, the unemployment rate can be defined as the percentage of labour force
involved in an active search for jobs. During periods of recovery, unemployment data acts as a
lagging indicator. Unemployment is also closely linked to consumer sentiment. An extended
period of unemployment is extremely destructive for consumer sentiment, since it affects
consumer spending and overall economic growth.
Other things being equal, a weakening US labor market is usually considered bearish for the US
dollar.

7. Capacity Utilization

This indicator helps to analyze the performance of the US manufacturing sector, taken as a
proportion of its full capacity. Factors such as normal downtime are also considered. The
indicator value is calculated as a ratio of the industrial production index to an index of full
capacity.

Capacity utilization usually reflects the health of the manufacturing sector. It also sheds some
light on the possible trends that are likely to emerge in the future, along with clues about
inflation.

History shows that rates below 78% point to an upcoming recession. It can also mean that the
economy is already facing a recession.

8. Industrial Production Index

This indicator measures the level of US output (in terms of material produced), as compared to a
base year, in three broad categories – mining, manufacturing and gas/electric utilities. The US
Fed compiles the data and creates this report, which is published by mid-month, each month.
Some part of the index data is from hard data (directly from industries or official surveys), but
this may not be available every month.

There are various other key economic indicators that are worth following, such as inflation
rate, durable goods orders, initial jobless claims, Consumer Confidence Index, central bank policy
statements and sentiment surveys. So, make sure you have an economic calendar handy to keep
track of upcoming announcements and reports.

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