Browse the library
Finabase Learn
Economics and economic data
How the economy moves markets — GDP, inflation, jobs, the Federal Reserve, interest rates, the yield curve and the economic calendar.
Foundations
- How the economy affects stocks: growth, inflation, jobs and rates How GDP, inflation, jobs and interest rates feed into company earnings and discount rates, why stocks move before the economy does, and where the link breaks.
- The business cycle: expansions, peaks, recessions and troughs What the business cycle is, its four phases, how long US expansions and recessions have lasted since 1945, what tends to end them, and how unemployment tracks the cycle.
- What is a recession? How the NBER dates US recessions How the NBER’s Business Cycle Dating Committee decides when US recessions start and end, why “two negative quarters” is not the rule, and what 2001 and 2022 show.
- Leading, lagging and coincident indicators: what turns first Which economic indicators turn before, with and after the business cycle, what the Conference Board indexes hold, and how claims and permits behaved in 2001 and 2008.
- Stagflation: high inflation, weak growth and the 1970s lesson What stagflation is, how the 1970s combined double-digit inflation with rising unemployment, why it is hard on stocks and bonds, and how to tell it apart from 2022.
- Fiscal vs monetary policy: who controls which lever How fiscal policy (taxes, spending, borrowing) and monetary policy (the Fed’s rates and balance sheet) differ, how they interact, and what 2020–2026 shows.
- Government debt and deficits: how US federal borrowing works The difference between the deficit and the debt, debt held by the public, debt-to-GDP, the debt ceiling, and what Treasury data show for fiscal 2007–2026.
- Money supply and M2: what it measures and what it tells you What M1 and M2 include, how banks and the Fed change the money supply, the velocity arithmetic, and what M2 and CPI did from the 1960s through 2026.
- The economic calendar: when US data come out and how to read them When the jobs report, CPI, GDP, retail sales and FOMC decisions are released, who publishes them, and how to read the consensus, actual and prior columns.
- How markets react to economic data: surprises, regimes, revisions Why stocks, bonds and the dollar move on the gap between data and forecasts, why good news can be bad news, and how revisions and positioning change the reaction.
- Seasonal adjustment and data revisions: why the numbers change How agencies remove seasonal patterns, what annualized rates mean, and how GDP and payroll figures get revised, with BEA revision statistics and BLS benchmarks.
Economic indicators
- GDP explained: how gross domestic product is measured and read What GDP counts, the C + I + G + NX arithmetic with real 2026 numbers, how annualized growth rates work, why the three estimates get revised, and how markets react.
- Real vs nominal GDP: deflators, chained dollars and why both matter How nominal and real GDP differ, how the GDP price deflator and chained 2017 dollars are built, a worked two-good example, and when to use each measure.
- Inflation: what it is, how it’s measured and what it does to money What inflation is, what causes it, how CPI and PCE measure it, why the Fed aims for 2%, and how rising prices affect cash, bonds and stocks, with 1948–2026 data.
- The CPI report: how BLS builds it and how to read it How the Consumer Price Index is built (basket, weights, shelter and owners’ equivalent rent), what headline and core mean, and how to read m/m and y/y changes.
- Core inflation: why food and energy are left out What core inflation is, why it drops food and energy, how much monthly CPI noise it removes, and how to annualize and read core prints.
- PCE inflation: the Fed’s preferred gauge vs the CPI What the PCE price index measures, why the Fed’s 2% goal uses it instead of the CPI, the formula, weight and scope differences, and how the two gauges compare since 2015.
- Producer Price Index (PPI): final demand, pipeline prices and CPI What the Producer Price Index measures, how the final demand index is built, how PPI differs from CPI, and whether producer prices lead consumer prices.
- The jobs report: how to read nonfarm payrolls and the two surveys How the monthly Employment Situation report is built, why payrolls and the unemployment rate come from different surveys, how revisions work and how to read a release.
- The unemployment rate: U-3, U-6 and labor force participation How BLS measures unemployment, what the six measures U-1 to U-6 count, why participation matters, and how to read the rate without being misled by it.
- Wage growth: average hourly earnings, real wages and composition What average hourly earnings measure, how to turn wage growth into real wage growth, why the April 2020 spike was not a raise, and how wages tie into inflation.
- JOLTS: job openings, quits and what labor turnover reveals How the BLS Job Openings and Labor Turnover Survey defines openings, hires, quits and layoffs, how the rates are computed, and what openings and quits show since 2001.
- Jobless claims: reading the weekly unemployment insurance report How weekly initial and continuing jobless claims are counted, why the 4-week average matters, and what claims did in 2001, 2009 and 2020.
- The Sahm rule: a recession signal from the unemployment rate How the Sahm rule works, a step-by-step calculation, its record since 1960, why it crossed 0.50 in 2024 with no recession following, and real-time versus revised data.
- Retail sales report: what it measures and how to read it How the Census Bureau’s monthly retail sales report is built, why it is not adjusted for inflation, the control group arithmetic, confidence intervals and revisions.
- Consumer sentiment and confidence: how the surveys work How the Michigan sentiment and Conference Board confidence indexes are built, why soft survey data and hard spending data disagree, and how to read them.
- PMI explained: how purchasing managers’ indexes work How a purchasing managers’ index is built from survey answers, what the 50 line means, how ISM and S&P Global PMIs differ, and why a PMI measures breadth, not size.
- Industrial production and capacity utilization: the Fed’s G.17 What the Federal Reserve’s industrial production index and capacity utilization rate measure, how they are calculated, how to read them, and what 60 years of data show.
- Housing data: starts, permits and new home sales explained How to read the Census Bureau’s housing starts, building permits and new home sales reports: definitions, annual rates, confidence intervals, and what the history shows.
The Fed and interest rates
- The Federal Reserve: structure, mandate and policy tools How the Fed is organized, what its dual mandate means, the tools it uses to set interest rates, and seven decades of the fed funds rate in one chart.
- FOMC meetings: schedule, statement, minutes and how to read them What happens at the Fed’s eight yearly FOMC meetings, the 2:00 p.m. statement, press conference and minutes, and every rate step from 2008 to 2026.
- Federal funds rate: target range, IORB and the effective rate What the fed funds rate is, how the Fed keeps it inside a 25 bp target range with IORB, reverse repos and standing repos, and how it is measured each day.
- The Fed dot plot: how to read the FOMC’s rate projections What each dot in the Fed’s dot plot means, how the median and central tendency are built, what the September 2026 projections showed, and why dots are not promises.
- Quantitative easing and tightening: the Fed’s balance sheet How QE and QT work, every round from 2008 to 2025 with dates and amounts, the Fed’s $0.9 trillion to $9 trillion balance sheet, and what it means for markets.
- Real interest rates: nominal rates minus inflation, explained How to compute a real interest rate, ex post versus ex ante, the real fed funds rate since 1960 and the 10-year TIPS yield, and why real rates drive markets.
- The Taylor rule: formula, worked example and Fed policy since 1990 The Taylor (1993) rule step by step, a worked 2026 calculation, how its prescription compares with the actual fed funds rate since 1990, and why it is a benchmark.
- How Fed decisions move markets: expectations, surprises and yields Why markets react to Fed surprises rather than decisions, how fed funds futures and the 2-year yield price the rate path, and what 2015–2026 data show.
Bonds and yields
- The yield curve: shapes, slopes and what each end tells you How the Treasury yield curve is built, why it slopes up, flattens or inverts, what the short and long ends reflect, and how to read it with real 1960–2026 data.
- Yield curve inversion: what it signals and its recession record What an inverted yield curve is, why it has preceded US recessions, its full track record since 1966 including the 2022–2024 inversion, and 10y–3m versus 10y–2y.
- Bond prices and yields: why prices fall when yields rise The present-value math behind bond prices, worked examples of price, current yield and yield to maturity, pull to par, and what TLT did when the 30-year yield rose.
- Treasury bills, notes and bonds: the US government’s debt menu The marketable Treasury securities explained: bill, note and bond maturities, how each pays interest, TIPS and floating-rate notes, taxes, and how to compare them.
- Treasury auctions: how the US sells its debt and how to read results How single-price Treasury auctions work, competitive versus noncompetitive bids, the 35% rule, and how to read high yield, bid-to-cover, tails and bidder shares.
- The 10-year Treasury yield: why it matters and what drives it Why the 10-year Treasury yield is the benchmark rate, its history since 1953, how it splits into real yield and breakeven inflation, and how it reaches mortgages.
- TIPS and breakeven inflation: how inflation-protected bonds work How TIPS adjust principal for inflation, how breakeven inflation is read from TIPS and Treasury yields, and how breakevens compare with realized CPI.
Currencies, trade and commodities
- The US dollar and exchange rates: indexes, drivers and earnings How exchange rates are quoted, what the Fed broad dollar index and ICE DXY measure, what moves currencies, and how a strong dollar changes US company earnings.
- Trade balance: how the US trade deficit is measured and read What the monthly US trade report measures, why imports subtract from GDP, how the deficit links to saving and capital flows, and what 1992–2026 data show.
- Oil prices and the economy: WTI, Brent, gasoline and inflation How crude oil is priced, the difference between WTI and Brent, how oil reaches gasoline and CPI, and what 40 years of EIA price data show about booms and busts.
- Central banks around the world: Fed, ECB, BOJ, BoE and more The policy rates and mandates of the Fed, ECB, Bank of Japan, Bank of England, Bank of Canada and PBOC, and how gaps between them move currencies like USD/JPY.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.