How to read the economic calendar
Three columns matter: expected, actual and previous. The news is the gap between the first two.
The three columns
"Previous" is the figure from the last release. It gives the context: is this measure speeding up or slowing down?
"Expected" is the economists' consensus. That number is priced into the market before the release. It is the bar.
"Actual" appears at the moment of release. Only the gap between actual and expected is new information, and only that moves prices.
Impact does not mean importance
A "high impact" label does not mean the measure matters more for the economy. It means it has historically moved markets more.
CPI and the jobs report are high impact because they directly change rate expectations. Industrial production can matter for the economy and move nothing.
If you want to know why a day was turbulent, look at which releases changed expectations for the central bank.
Revisions
Many figures are revised months later, once fuller data comes in. A strong jobs report can be revised noticeably lower thirty days later.
Markets react sharply to the first release and barely at all to the revision, even though the revision is more accurate.
So do not build a conviction on a single number. The trend over several months is far more reliable than any individual release.
How to read a row
| Column | What it shows | Does it move the market? |
|---|---|---|
| Previous | The context | No |
| Expected | What is already priced in | No |
| Actual | Reality | Only if it differs from expectations |
Key terms in this lesson
- Economic calendar
- The schedule of economic data releases, with expectations for each one.
- Surprise
- The gap between the actual figure and the expected one. This is what moves prices.
- Revision
- A correction to a previously published figure, once fuller data comes in.
Quick check
Inflation was expected at 3.2% and came in at 3.1%. How should you read that?
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