Importance: ****
 
 Definition: The government's employment report covers information on payroll jobs, including employment, average workweek, hourly earnings, and unemployment. Unlike the payroll jobs data, which is a coincident indicator of economic activity (it changes direction at the same time as the economy), the unemployment rate is a lagging indicator. It increases or falls following a change in economy activity.  Consequently, it is of far less significance to economists and investors.

Related Indicators:

Source: Department of Labor

Frequency: Monthly

Availability: One week following the reported month

Direction:

Timing:

Volatility: None

Likely Impact on Financial Markets:

        Interest Rates: Smaller-than-expected unemployment rate or declining 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:

In its favor and unlike the payroll jobs data, the unemployment rate is not subject to change. During the
past year, the unemployment rate has gradually declined and recently been running at levels below
what economists believe to be the "natural rate" or that rate at which sustained unemployment can
exist without rekindling inflation. The natural rate has been pegged at 5.5%. Consequently, four months at levels as low as 5.1% have many investors and economists concerned inflation is just around the
corner.

WEB Links

A Graph of the latest Unemployment Rate data from The Economic Statistics Briefing Room of the White House .

The latest Unemployment Rate report from BLS.