5 ways to see if the economy's health is holding up todayheadline

Sometimes it’s just plain hard to see if the economy is holding up.

You can gauge things by paying attention to things like store-or-restaurant closings or gasoline prices that are rising or falling. 

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Yes, restaurants and stores are shutting down because consumers are skittish, or a business simply never recovered from the Covid-19 pandemic.

Another good one is to watch the signs homebuilders put up to attract visits to their subdivisions. A clear signal something was off ahead of the Great Recession in 2008 was when the builders started adding in things like “free builder up grades.”

But those events may be limited to just one community or neighborhood. They may offer a full picture.

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These are indications that something is happening you may not want. And it will take time before it turns up in government data.

There are some reports coming up this week, however, that will be fairly close to real time and are worth looking at now. Here’s a look at five to watch this week, especially in the aftermath of the stock-market plunge this month. 

You can assume the Federal Reserve, the Trump Administration, banks, businesses and builders watch these indicators closely.

The Empire State Manufacturing Index and the Philadelphia Manufacturing Index

These reports are published by the Federal Reserve Banks of New York and Philadelphia based on surveys taken roughly mid-month. 

The New York Fed’s report, called the Empire State Manufacturing report comes out Tuesday morning. Philadelphia’s report is due Thursday morning. 

These reports are available on each bank’s website.

They offer a glimpse of whether jobs are growing in their districts, if business are able to raise prices if orders, sales, and the like are rising or falling and over what time.

Here’s a description of all the Reserve Districts.

The Home Builder Confidence Index

Released by the National Association Home Builders with Wells Fargo Bank. Due Wednesday morning. This reports offers a view of what builders are actually hearing from potential customers. 

There have been some anecdotal reports that many home buyers are giving up waiting for mortgage rates to come down. 

Fact is, they have been stubbornly above 6% since 2023.

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Weekly jobless claims from the Bureau of Labor Statistics

Due every Thursday (unless there’s a holiday). This report tracks people who are signing for unemployment compensation. 

The data are roughly a week old. If you look at the data over, say, a year, trends become visible.

A helpful number for comparison is the 4-week moving average. Available in the weekly report, it’s been right around 223,000 of late, which suggests the U.S. employment picture is relatively stable. 

During the 2008-2009 financial crisis, jobless claims reached as high as 665,000 in one week. In one week in April 2020, at the worst of the Covid-19 pandemic, more 6 million sought benefits.

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Building permits

Due Thursday. This reports measures building permits around the country. The data comes from Census Bureau once a month. Most media look at Housing Starts, which are part of the same report.

Census Bureau staffers, however, usually go to the building permits. 

The reason: Building permits are a great economic indicator because they tell you what’s coming. Builders don’t take out building permits until they’re ready to break ground. They have buyers or tenants lined up who have put down deposits.

Cities and counties usually require permits and inspect a house or apartment through to completion. They don’t want buildings to fall down. As important, permit fees are often major sources of municipal revenue.

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