A primer on short-term linkages between key economic data series

Why do analysts look at economic data? The simple answer is that investors and planners must look ahead, and economic data help them forecast. If there is new information on the economy, on demand, on profit potential, or on prices, among other factors, then the underlying value of financial and real investments may shift, leading to changes in financial values as well as business investment projections and plans. ; There are a number of time horizons relevant to how analysts evaluate economic data and use them for forecasting. The evaluation of various longer-run fundamentals often begins with examining short-run relationships among economic variables. This article is a brief guide to some of the well-known short-term relationships between economic data series upon which many analysts focus. It explains how analysts use data in concurrent month forecasts and what some key relationships are, outlines the monthly calendar of economic releases, and reports on typical lags between various dependent and explanatory variables. The article attempts to clarify how analysts carry information from one economic release into their view of the strength of other economic indicators.