3 Economic Data Points Traders Must Follow

Useful takeaways from this story.

Company earnings drive valuation: strong 2026 earnings growth supports higher prices even if P/E multiples remain elevated.

Monthly jobs reports (NFP and wages) signal labor-market strength and influence Fed rate expectations.

Monitor three inflation readings—CPI, PPI, and PCE—because the Fed uses them together to set monetary policy.

# Why these three data points matter

Traders often hear commentators refer to "the data." That phrase can mean many things. For practical trading, focus on three concrete measures that collectively shape market direction: company earnings, the monthly jobs report, and inflation readings (CPI, PPI, and PCE). Each affects price discovery differently and together they influence interest-rate expectations.

# 1) Company earnings: the fundamental anchor

Watch forward earnings estimates and revisions—those move multiples more than headline index prints.

# 2) Jobs reports (NFP and wage growth): real-time economic temperature

The U.S. nonfarm payroll (NFP) report is the monthly snapshot traders watch for labor-market strength. The report estimates jobs added in the month and includes wage growth measures. The context notes these figures are revised often and should be treated as estimates.

Employment growth and wage trends affect consumer spending, corporate revenue, and inflation pressures.

A hot jobs report (strong payrolls and rising wages) typically raises odds of Fed tightening, which can pressure rate-sensitive sectors and boost short-term volatility.
A weak report can lower rate expectations and help cyclical and growth assets.

# 3) Inflation measures (CPI, PPI, PCE): the Fed's data menu

Three inflation series matter: the Consumer Price Index (CPI), the Producer Price Index (PPI), and the Personal Consumption Expenditures (PCE) report. The Federal Reserve watches all three when setting policy. The PCE is singled out in official communications as a preferred measure of consumer spending and inflation.

The Fed's policy goals listed in the context are: inflation below 2% per year, full employment, and moderate interest rates. Deviations in these readings shift policy expectations and market pricing.

Surprise inflation prints can move yields and equities sharply. Higher-than-expected inflation typically lifts short-term yields and can hurt multiple-driven assets.
Watch core readings (excluding volatile food and energy) for persistent trends that influence forward guidance.

# How to use these three together

# Next steps for a trader

Track earnings-season revisions and aggregate beats/misses for signs of durable trend changes.
Mark NFP release dates and build contingency plans for large moves in rate-sensitive assets.