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發表於 2007-3-7 22:06:46
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Why Do Investors Care On Nonfarm payroll employment Data?
Why Do Investors Care?
If ever there was an economic report that can move the markets, The Nonfarm payroll employment data is the right one. The anticipation on Wall Street each month is palpable, the reactions are dramatic, and the information for investors is invaluable.
By digging just a little deeper than the headline unemployment rate, investors can take more strategic control of their portfolio and even take advantage of unique investment opportunities that often arise in the days surrounding this report.
The employment data give the most comprehensive report on how many people are looking for jobs, how many have them, what they're getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy.
Nonfarm payrolls are categorized by sectors. This sector data can go a long way in helping investors determine in which economic sectors they intend to invest.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy.
If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking the jobs data, investors can sense the degree of tightness in the job market.
If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall.
No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events.
In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process. |
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