Doing this well requires a deep knowledge of the data mixed with a goodly dose of economic theory and economic judgment. Members of the Board staff continuously analyze the arriving data to learn what they can about the level and composition of economic activity, inflation, and other key aggregates.
At the most mechanical level, this exercise requires a detailed understanding of how the U.S. statistical agencies use the information in current data releases to estimate economic aggregates - how the components of retail sales are linked to estimates of personal consumption, for example. But often the linkages between data releases and the key economic aggregates are not so straightforward.