Most closely followed is the change in nonfarm payrolls. Increasing payrolls are normal during periods of economic growth, as are modestly rising hourly wages. A sharp rise in hours and hourly wages may indicate that firms are having difficulty getting workers, which may signal greater inflationary risks. This could prompt the Fed to increase interest rates. Payrolls, hourly wages and/or hours-worked typically fall during economic slowdowns, although hours tend to decline before payrolls are cut.
The unemployment rate receives the most attention from the household survey. A sustained downward trend in the unemployment rate suggests that labour markets are becoming too tight and that wages may rise, putting upward pressure on inflation. The Fed would respond to this by raising interest rates.
