Employment Situation
Definition
The employment situation is a set of labor market indicators. The unemployment rate measures the number of unemployed as a percentage of the labor force. Non-farm payroll employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The average workweek reflects the number of hours worked in the non-farm sector. Average hourly earnings reveal the basic hourly rate for major industries as indicated in non-farm payrolls.
How This Affects Us
The employment data gives the most complete report on how many people have jobs, how many people are searching for jobs, what they're getting paid and how many hours they are working. These numbers measure the current state as well as the future direction of the economy. Non-farm payrolls are classified by sectors. This sector data can be of considerable help in determining in which sectors to invest. The employment statistics also provide insight on wage trends, and wage inflation. Wage inflation is negative indicator for the Federal Reserve. If inflation is a problem, the Fed is limited in providing economic incentive. If wage inflation threatens, it's strong sign that interest rates will rise and stock prices will fall.
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