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Top Macro Economic Data Releases for Trading: Purchasing Managers Report

20 Years ago | March 19, 2014 11/27/21, 12:00 AM

One of the most universal of all pieces of Monthly data is the Purchasing Managers Report (PMI) for most countries. Many have two versions: one focused on the Manufacturing Sector and the other on the Service Sector of the economy in question. Many have a “Flash” report released about ten or so days ahead of the “Final” report. The Final reports appear toward the start of the following month. 

The nice thing about the PMI data is that the surveys are roughly comparable between countries and that the data are one of the earliest available of ecomoic readings released each month. The PMI indices are usually based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. A PMI of greater than 50 represents expansion, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. 

After having used a wide range of PMI indices for many years, I find them most useful as a contemporaneous measure of the state of an economy. I don’t find it to be a useful predictor of future economic performance, but that is not its purpose. This tends to be a key market mover and warrants attention by active traders.

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