Monster.com is one of the bigger online job search sites.
Similar to The Conference Board's help wanted index, Monster generates an
index of available jobs based on postings collected from other sources.
It collects job postings from all over the web, maintaining a database
of over 1,500 web sites, including itself, Monster.com.
The difference between Monster and the Conference Board is that Monster
collects job ads from online postings while the Conference Board collects
the help-wanted ads from the various nationally syndicated newspapers.
Also, the Monster index is not seasonally
adjusted.
Significance Of This Economic Report To The Trader or Investor
The employment report provides insight into the health of companies
by quantifying the number of jobs employers are trying to fill. In
addition, the report also attempts to shed light on the general strength of the
economy. 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. Higher wages may possibly lead to wage inflation, which can be viewed as bad news
for the stock and bond markets. The Federal Reserve officials are always vigilant in trying to keep inflation in-check. Potential inflationary pressures are always a major concern.
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. Therefore, in addition to concerns of
rising inflation, the federal reserve is just as concerned about the rising unemployment
rate. In an economy with a rising unemployment rate, the fed tends to be
more vigilant and is more willing to ease its monetary policy by
reducing interest rates.
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.