Monster Employment Index
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| Released on
6/1/06
For
May 2006
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Monster Employment Index
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| Actual |
167
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Definition
The Monster Employment Index is a comprehensive monthly analysis of U.S. online job demand. It is conducted by Monster Worldwide, Inc. and is based on a real-time review of millions of employer job opportunities culled from more than 1,500 Web sites, including a variety of corporate career sites, job boards and Monster. The Index presents a snapshot of employer online recruitment activity nationwide. It was launched in April 2004 with data collected since October 2003.
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Why Do Investors Care?
In addition to providing insight on the general strength of the economy, this report gives a sense of how many jobs employers are trying to fill. If that number is relatively high, it could mean there is a shortage of available workers and companies may have to offer higher wages to attract them. This leads to wage inflation, which is bad news for the stock and bond markets. Federal Reserve officials are always worried about the potential for inflationary pressures.
When the employment index measuring job availability is falling, this bodes well for the bond market because it implies a drop in labor demand and perhaps an economic downturn. While the Fed worries about inflation, they also are concerned about rising unemployment. A rising jobless rate can mean a more accommodative monetary policy.
The equity market prefers to see healthy economic growth and thus would rather see increases in the employment index. An increase in job demand means that consumers will have more money to spend on goods and services - and this ultimately affects profits.
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