Growth data (GDP, PMI)
Growth data shows how fast the US economy is expanding or slowing. GDP gives a broad, backward-looking measure every quarter; PMI surveys and retail sales give earlier signals each month. Markets read these figures through growth and rate expectations.
What is GDP?
Gross domestic product (GDP) is the total value of goods and services produced in a country over a period. In the US it is published quarterly by the Bureau of Economic Analysis (BEA). The headline figure is inflation-adjusted growth against the previous quarter, expressed as an annualised rate. In other words, quarterly growth is converted into the rate it would reach if it held at the same pace for a full year.
Each quarter's figure arrives in stages: first the advance estimate, about a month after the quarter ends, then the second and third estimates at monthly intervals. Markets react most to the advance estimate; later estimates can revise the figure up or down. The releases usually come at 08:30 US Eastern time, which is 12:30 or 13:30 UTC depending on US daylight saving time.
What is a PMI?
A purchasing managers' index (PMI) is built from surveys asking companies about orders, output, employment and prices. It is read around the 50 line: above 50 points to expansion in that area, below 50 to contraction. The distance from 50 says how widespread the change is; it does not measure the size of growth directly.
Two main PMI families are watched in the US. The ISM manufacturing PMI usually comes on the first business day of the month and the ISM services PMI on the third business day, at 10:00 US Eastern time. S&P Global publishes flash PMIs before the month ends, with final figures following later. Flash PMIs draw attention because they are among the first readings on that month.
Other figures worth watching
- Retail sales: released monthly at 08:30 ET by the US Census Bureau. One of the first measures of consumer spending, given in nominal terms (not adjusted for inflation).
- PMI sub-indices: new orders hint at the direction of demand and the prices component at cost pressure. They can draw as much attention as the headline.
- Revisions: both GDP and retail sales can be revised later. The first figure is not always the last word.
How markets read growth data
What drives the reaction is less the figure itself than its gap from the forecast (consensus). The effect on crypto usually comes through rate expectations, the dollar and overall risk appetite. The cards below are common tendencies, not rules.
Stronger growth than expected
Can be read as a sign of a sound economy. But when inflation is a worry, strong data can also strengthen the view that rate cuts will be delayed.
Weaker growth than expected
If it is read as a slowdown or recession worry, risk assets can come under pressure.
Softer but moderate data
If it is read as a limited slowdown that leaves room for rate cuts, risk assets can find support.
What it shows, what it does not prove
What it shows
- Whether the economy is moving towards expansion or contraction
- How far the figure differed from the market's forecast
- For a PMI, whether the change against the 50 line is widespread or limited
What it does not prove
- How growth will turn out in the coming quarters; GDP describes a past period
- Which way price will move after the release
- That a single PMI reading starts a trend
The MarketLevelMap view
How it relates to zones
Around growth releases price can move quickly into and out of a support or resistance zone. Reading the zone as a band helps to tell the long wicks at release time apart from a lasting breakout.
ISM data comes at 10:00 ET, after the US stock market opens, so the reaction can take shape together with equities. It is sounder to judge the move by 1H or 4H closes and the next candles than by the release candle's wick.
Often confused with
For general information only. Not investment advice.Last updated: