Reference

Economic terms, in plain language.

Every term we use in a report, defined without the jargon. If a number in one of our reports isn't clear, it should be here.

Rates & the Fed

Federal funds rate: The interest rate the Fed sets; it steers borrowing costs across the whole economy.
Fed funds target (ceiling): The top of the Fed's target range for its policy rate.
10-year Treasury yield: The interest rate on 10-year U.S. government debt; a benchmark for mortgages and business loans.
Yield curve (10yr-2yr): The gap between 10-year and 2-year Treasury yields. When it goes negative, markets are worried about recession.
30-year fixed mortgage: The average rate on a 30-year home loan.
Basis points (bp): Hundredths of a percentage point. 25 bp is 0.25%.

CPI (Consumer Price Index): What a typical basket of goods and services costs; the headline inflation gauge.
Core CPI: CPI without food and energy, which swing a lot. A cleaner read on underlying inflation.
PCE price index: The Fed's preferred inflation measure, based on what people actually spend on.
Inflation expectations: How much inflation households expect over the year ahead.

Unemployment rate: The share of people who want a job and are looking, but don't have one.
Nonfarm payrolls: The total number of jobs on employer books, excluding farms; the broadest jobs count.
Initial jobless claims: New applications for unemployment benefits each week; an early read on layoffs.
Labor force participation: The share of working-age people either working or looking for work.

GDP: The total value of everything the economy produces; the broadest growth gauge.
Retail sales: Total spending at stores and online; a timely read on consumer demand.
Consumer sentiment: A survey of how households feel about the economy and their own finances.
Personal saving rate: The share of after-tax income households save rather than spend.
Real disposable income: After-tax income adjusted for inflation, so it reflects real buying power.
Revolving credit: Consumer debt you can borrow against repeatedly, mainly credit cards.
Delinquency rate: The share of loans behind on payments.

Case-Shiller index: A widely watched measure of how U.S. home prices change over time.
FHFA house price index: A home-price gauge based on mortgages backed by Fannie Mae and Freddie Mac.
Housing starts: The number of new homes builders began, at an annual pace.
Building permits: Permits issued for new construction; a leading signal of future building.
New home sales: Sales of newly built single-family homes, at an annual pace.
Months' supply: How long current inventory would last at the current sales pace. Higher means more choice for buyers.
Housing affordability index: Whether a typical family earns enough to qualify for a mortgage on a median-priced home. 100 means exactly enough.

Industrial production: The output of factories, mines and utilities.
Capacity utilization: How much of industry's production capacity is actually in use.
Durable goods orders: New orders for long-lasting manufactured goods like machines and vehicles.
Core capital goods orders: Business orders for equipment, excluding aircraft and defense; a proxy for investment.
Business inventories: The value of goods held by manufacturers, wholesalers and retailers.
Inventory-to-sales ratio: How much stock businesses hold relative to sales. Rising can signal slowing demand.

Credit spread: The extra yield lenders charge over Treasuries to hold riskier bonds. Wider means more stress.
High-yield spread: The credit spread on below-investment-grade ('junk') bonds.
Financial conditions index: A composite of rates, spreads and leverage. Below zero means conditions are looser than average.
Financial stress index: A gauge of strain in financial markets. Higher means more stress.
VIX: The market's expected stock-market swings over the next month; the 'fear gauge.'

Year over year (YoY): Change from the same period a year earlier.
Seasonally adjusted: Smoothed to remove predictable seasonal swings, so the trend is comparable month to month.
SAAR: Seasonally adjusted annual rate: a monthly figure scaled to a full-year pace.
Vintage: The dated version of a data series or forecast, so a result can be reproduced later.
Confidence band: The range the actual value is likely to fall within. Wider means more uncertainty.
Scenario: A projection under a specific assumption, such as a weaker or stronger economy.
Backtest: Checking how a forecast would have done against what actually happened.
SARIMAX: A statistical time-series model that can use seasonality and outside drivers to forecast.
Exogenous driver: An outside variable fed into a model, like using national unemployment to help forecast a state's.

Missing a term you saw in a report? Tell us and we'll add it.