Importance: ****

Definition: Except for the GDP, the government's employment report is the most significant economic indicator reported, setting the tone for the entire month. It has been referred to as "the king of kings," providing information on employment, the average workweek, hourly earnings, and the unemployment rate.

Related Indicators:

Source: Department of Labor

Frequency: Monthly

Availability: About one week following the reported month.

Direction:

Timing:

Volatility: Moderate

Likely Impact of Financial Markets:

        Interest Rates: Larger-than-expected monthly increase or increasing trend is considered
        inflationary, causing bond prices to drop and yields interest rates to rise.

        Stock Prices:

        Exchange Rates:

Ability to Affect Markets:

Analysis of the Indicator:

The data covers the following major categories:

Goods-Producing
    Manufacturing
     Construction
     Mining

Service-Producing
    Transportation and Public Utilities
     Wholesale Trade
     Retail Trade
     Finance, Insurance, and Real Estate
     Services
     Government

   Economists use payroll jobs data to predict other economic indicators. For example, there is a strong
correlation between construction payroll figures and housing starts, manufacturing and industrial
production activity, total payroll and personal income. The data is also used to refine GDP estimates.

While the payroll data is extremely important, it is subject to sizeable revisions. The bond market views a weak report favorably and vice-versa.

Web Links

A Graph of the latest Employment - Payroll Jobs data from The Economic Statistics Briefing Room of the White House.

The latest Employment - Payroll Jobs report from BLS.