Labour market statistics — unemployment rate, non-farm payrolls, wage growth — that signal consumer financial health and business confidence in the economic cycle.
Deeper Explanation
Employment is both a coincident and lagging indicator. Payrolls report the current state of the labour market; unemployment peaks several months after a recession ends. For investors, employment data reveals consumer spending capacity (employed consumers spend; unemployed ones do not) and business confidence (businesses hire when confident about future demand). Rising wage data signals potential inflationary pressure (central banks watch wage growth carefully). Very low unemployment — counterintuitively — can be a late-cycle signal: when every business that wants to hire has hired, the cycle may be near its peak. Employment quality matters too: full-time vs. part-time, manufacturing vs. services, wage distribution.
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