Consensus Outlook
A strong 180,000 rise in nonfarm payrolls is Econoday's consensus for the December employment report with the unemployment rate seen holding steady at a 49-year low of 3.7 percent. Average hourly earnings, after subdued showings in November and October, are expected to rise a moderate 0.3 percent though the year-on-year rate is expected to slip 1 tenth to 3.0 percent. Private payrolls are seen rising 175,000 with manufacturing payrolls expected to increase a solid 19,000 which would be on top of November's 27,000 surge. The workweek is seen rising incrementally to 34.5 hours with the labor participation rate unchanged at 62.9 percent.
Relative Performance Index
Econoday's RPI provides a handy summary measure of how an economy has recently been evolving relative to market expectations.
A reading above zero means that the economy in general has been performing more strongly than expected and vice versa for a reading below zero. The closer is the value to the maximum (+100) or minimum (-100) levels, the greater is the degree to which markets have been under- or over-estimating economic activity.
A zero outturn would imply that, on average, the market consensus has been correct. Note too that the index is sensitized to place extra weight upon those indicators that investors consider to be the most important.
Definition
The most closely watched of all economic indicators, the employment situation is a set of monthly labor market indicators based on two separate reports: the establishment survey which tracks 650,000 worksites and offers the nonfarm payroll and average hourly earnings headlines and the household survey which interviews 60,000 households and generates the unemployment rate.
Nonfarm payrolls track the number of part-time and full-time employees in both business and government. Average hourly earnings track employee pay while the average workweek, also part of the establishment survey, tracks the number of hours worked. The report's private payroll measure excludes government workers.
The unemployment rate measures the number of unemployed as a percentage of the labor force. In order to be counted as unemployed, one must be actively looking for work. Other commonly known data from the household survey include the labor supply and discouraged workers. Why Investors Care