Employment Situation Report

[H] Employment Situation Report

Bureau of Labor and Statistics; the first Friday of each month, 8:30am EST, covers previous month data

The Employment Situation Report is a monthly indicator which contains two major parts. One part is the unemployment and new jobs created: the report reveals the unemployment rate and the change in the unemployment rate. The second part of the report indicates things like average weekly hours worked and average hourly earnings. This data is important for determining the tightness of the labor market, which is a major determinant of inflation. The Bureau of Labor surveys over 250 regions across the United States and covers almost every major industry. This indicator is certainly one of the most watched indicators and almost always moves markets. Investors value the fact that information in the Employment report is very timely as it is less than a week old. The report provides one of the best snapshots of the health of the economy.

[H] FOMC Meeting (Federal Open Market Committee): Rate announcement

The meeting of the US Federal Bank representatives, held 8 times a year. The decision about the prime interest rate is published during each meeting (around 14:15 EST).

The FED (the Federal Reserve of USA) is responsible for managing the US monetary policy, controlling the banks, providing services to governmental organizations and citizens, and maintaining the country’s financial stability.

There are 12 Fed regions in the USA (each comprising several states), represented in the Fed committee by regional commissioners.

The rate of interest on a currency is in practice the price of the money. The higher the rate of interest on a currency, the more people will tend to hold that currency, to purchase it and in that way to strengthen the value of the currency. This is very important indicator affecting the rate of inflation and is a very big market mover.

There is great importance to the FOMC announcement, however – the content of the deliberation held in the meeting, which is published 2 weeks after the rate announcement, is almost as important to the markets.