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Thursday, September 2, 2010
The first Friday of each month, at 8:30 am EST, the Bureau of Labor releases the employment report for the previous month. Tomorrow's the day for August employment.
This is the "Big Bad Wolf" of the investment markets. Just about every month, but especially these days, traders hunker down in front of their terminals waiting for the release of the numbers. Some believe the whole future of the economy will be revealed by the number. And, of course, this goes on just about every month. What is our house made of - straw or bricks? Ooh...scary stuff.
If you watch CNBC, and the hype surrounding the number, you'll understand why the stock market is so volatile; and you'll be able to answer those who question why stock prices clearly rise and fall much more than the underlying values of the businesses they represent - something that many cite as evidence that the market can't be efficient.
The last I heard, economists are predicting that non-farm payroll will be down -100,000. If job loss is less or if, hard to imagine this, the economy added jobs, stocks should rally and bond yields increase. Part of the process, of course, is looking at other numbers in the report like the unemployment rate, hours worked, average wage and the number of long-term, chronically unemployed, which is setting a record.
Adding to the importance of the numbers, of course, is that we are in election season.
If you want to see the numbers and the report as it is released, you can go directly to the BLS site and see the report at 8:30 am. It is an interesting report in that it gives breakdowns in terms of demographics, ethnicities, and even industries - information that can be useful for the trader.
You'll notice that the unemployment rate and the number of jobs lost or gained are determined by separate surveys - a household survey and a business establishment survey.
So buckle up - here comes the "Big Bad Wolf."