In the coming week, several reports will be released that will lay out movements in the labor and housing market. These two areas are known as leading economic indicators, because they often signal potential signs of change in the economy.
"With the consumer spending driving approximately two-thirds of our economy, I'm watching reports and events that could impact spending," says Morgan Hill, CEO and owner of Hill & Hill Financial. "If we have good numbers for jobless claims and housing starts, I believe the market will continue to respond positively."
What's happening: On August 20, we'll get a report showing how many Americans filed for unemployment over the past week. For the past two consecutive weeks, the jobless claim numbers have dropped. This week was the first time since March that the weekly number came in below 1 million.
Why it matters: Investors and analysts are hoping to see a continued decrease as an end to, and recovery from, widespread layoffs. As more Americans return to work, consumer confidence is likely to return, too.
What it means for you: A continued decrease in jobless claims indicates that the economy is bouncing back, which is good news. If you're job hunting, consider which jobs are in high demand and make sure to get your cover letter and resume in shape.
What's happening: On Monday, the National Association of Home Builders will release its forecast for the month of August. On Tuesday, a report will show the number of new homes that began construction in July, and on Friday, the number of existing homes that were sold in July.
Why it matters: Homebuilding and home sales typically signal a strong and growing economy, so all these figures are important for gauging market movements in the coming months.
What it means for you: Positive housing reports could signal that the economy is recovering.
Remember, though, that traditional economic indicators such as housing and jobless claims have not influenced the stock market as much during this downturn as they have in the past, so even if these indicators don't continue to improve, your investments may not be much affected.
Regardless, a diverse portfolio can help prepare you for future market volatility, and it's never too late to get started.
Nancy Mann Jackson is an award-winning journalist who specializes in writing about personal finance, real estate, business, and other topics. Her work appears in several publications, including CNBC.com, Fortune.com, Entrepreneur, Working Mother, and CNNMoney.com.
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