The unemployment rate, even if it is considered to be a lagging indicator, it is by far an important one, traders looking at it as it is strongly linked with consumer spending, the very growth engine to watch when looking to anlyze an economy.
It is released at the same time like the NFP is and on this indicator lies the faith of the current stimulus that is running in the United States. The current pace is 85 bln usd on a monthly basis to be injected in the economy and this should go on and on until the unemployment rate should reach the 6.5% levels. This situation lasts for almost one year now and in the meantime the unemployment rate fell from the 7.9% to the current 7.6% level as you can see from the past six month data we’re analyzing under this project.
Now, because of this, we might have that the Fed will try to taper the QE program by this fall in order to see how the economy stands to such a move, and this should come before the actual unemployment rate to hit 6.5%.
This indicator shows the percentage of total work that is unemployed and actively seeking employment during the previous month.
The most important things to take into consideration when looking at the unemployment rate are the following:
- release date: first Friday of each month, after previous month ends;
- release time: 12:30 GMT, during North American session, together with the NFP;
- brings high levels of volatility;
- first tier data;
- also called jobless rate.