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Home» Binary Options School » Fundamental Analysis » The Affects of Employment Reports on the Financial Markets

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The Affects of Employment Reports on the Financial Markets

Written by: Sophie May

Any trader should be familiar with the readily available statistics on (un)employment. Jobs provide an income which gives a household spending power, making employment figures a good overall reflection of a country’s economy.

Nonfarm Payroll

The NFP report, released on the first Friday of each month, provides the most comprehensive employment statistics in the U.S. It reveals how many people are looking for jobs, how many are employed, what hours they work and what they are paid. This report has a huge market influence since its figures offer an accurate indicator of the current state of the U.S. economy and its future direction. This in turn impacts on the global economy.

Jobless Claims

This data reveals the total number of individuals each week who have filed for unemployment insurance for the first time. It is a useful reflection of the strength of the whole job market. The lower the total number of unemployment claims, the stronger the job market is, and vice-versa.

U.S. Unemployment Rate

This figure gives the percentage of employable people who are actively looking for work according to the Bureau of Labor Statistics. A rate of around 4% - 6% is thought to be healthy for the economy. Higher rates threaten a decrease in consumer spending, while lower rates can be inflationary because of the upwards pressure on salaries.

E.U. Unemployment Change

Employment statistics have a tangible effect on market sentiment and consumer confidence, translating directly to how much disposable income a nation has, retail sales, business investment, and the creation of more jobs. Generally the figures released for the whole of the E.U are less important as they are preceded by the reports of individual member states. Germany, France and Spain’s announcements are particularly crucial to traders.

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