Employment Indicators

Employment indicators are important as a gauge of joblessness and a benchmark of overall economy's growth rate. You have to know how many jobs are created, % actively employed, number of new people claiming unemployment and the rate of job growth.

Unemployment rate is a lagging indicator, meaning the effect of a bad economy (even a recession) or economic growth (or recovery) show on the employment numbers only after the fact. Employers (especially large organizations) are reluctant to lay off during bad times and hesitant to hire when economy improves.

Unemployment rate

The Unemployment Rate is determined by dividing the number of unemployed persons by the number of persons in the labour force. The labour force consists of those persons who are employed or actively seeking employment. Those not actively seeking employment (e.g. retirees) and certain other groups (e.g. children and persons in jail) are not included in the labour force. The unemployment rate is released monthly and consists of surveys of both business firms and households. The business firms survey consists of the payroll, workweek, hourly earnings, and total hours of manufacturing, retail, government jobs, and others. The household survey shows the overall labour force, and the number of people employed and unemployed.

The data are obtained from a monthly household survey and other data collected by the US Department of Labour and Bureau of Labour Statistics.

Nonfarm Employment change

The report on non-farm employment change is released around the same time as the unemployment report. As the name suggests, it gives an account of new jobs created in the previous month and is a direct assessment of the labour market.

Other Indicators
Other indicators include "Average Weekly Initial Claims for Unemployment Insurance" a leading indicator for traders on employment and "Average Weekly Hours" another leading indicator of possible employment changes (since the hours are changed in planning phase before implementing in through layoff or new hires)

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