Unemployment Rate Source: Department of Labor Frequency: Monthly Availability: One week following the reported month Possible Impact on Interest Rates: Smaller-than-expected unemployment rate or declining trend is considered inflationary, causing bond prices to drop and yields and interest rates to rise.
Current Data Reported May 5, 2000: This morning's employment report offered a few surprises with the unemployment rate falling to a 30-year low of 3.9%. Analysts expected the umployment rate to tick lower from March's 4.1% reading, but did not expected a figure this low. Payrolls increased by 340,000 jobs last month, following an upward revision to March from 416,000 to 458,000--also subtantially stronger than expected. The hourly earnings rate rose 0.4%, bringing the annualized rate to 3.8%, and the workweek increased to 34.6 hours. Overview: 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. 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.
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