Evaluating Forecasting Tools: PMI and GDP in Economic Analysis

As a financial planner for a mid-sized institution, you are expected to assist in navigating the economic landscape for portfolio management. In this role, your clients rely heavily on accurate economic forecasts to make informed investment decisions.

The institution is currently evaluating two leading forecasting tools: the Purchasing Managers' Index (PMI) and the Gross Domestic Product (GDP) growth rate. Your job is to assess the effectiveness of these tools in predicting economic conditions and how they can be integrated into the institution's investment strategies.

In your response, provide an analysis of both PMI and GDP, discussing how each tool can be utilized to forecast economic conditions. Include strengths and weaknesses of each tool and illustrate how they can influence investment decisions.