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• WORKERS, JOBS & WAGES
• 🧑‍💼 Unemployment 🧑‍💼
• 👷‍♀️ Jobs 👷‍♀️
• 💰 Wages 💰
• INFLATION & COST OF LIVING
• 💸 PCE: a broad index of things that people buy 💸
• ⛽ Gasoline ⛽
• 🍳 Eggs 🍳
• 🏢 Rent 🏢
• 🏠 Home prices 🏠
• INTEREST RATES
• 🏦 Federal Funds Rate 🏦
• 🏘️ Home mortgage interest rate 🏘️
• THE BROADER ECONOMY
• 🏭 Gross domestic product 🏭
• 📈 The stock market 📈

WORKERS, JOBS & WAGES

🧑‍💼 Unemployment 🧑‍💼

The unemployment rate is the percentage of people 16 or older who are in the labor force (either employed or seeking employment), but are out of work. This data is collected by the federal government through a large household survey. High unemployment rates are a bad sign for the economy, indicating that people are having a difficult time finding work. But extremely low unemployment, which improves Americans' financial security and indicates a vibrant economy, can stoke consumer demand that pushes up prices.

👷‍♀️ Jobs 👷‍♀️

The federal government surveys thousands of businesses every month to see how many employees they have. The resulting number is the closest estimate we have for number of jobs in the economy. The survey’s key topline number, referred to as total nonfarm employment, does not include self-employed workers whose businesses are unincorporated, unpaid family workers, agricultural workers and private household workers.

Most economists (and job seekers) see it as a good sign if the number of jobs is increasing, and a sign of a weakening economy when the number of jobs is decreasing. When companies need to expand hiring, workers tend to have greater bargaining power and wages tend to rise faster.

💰 Wages 💰

How much are people making per hour? The same government survey of businesses used for the jobs report also collects data on hourly earnings. So while it provides the most comprehensive monthly snapshot of workers’ paychecks, it does not include every job in the economy.

Generally, higher wages are good for workers and the economy. On the other hand, if wages go up too quickly, prices can follow, causing spikes in inflation.

INFLATION & COST OF LIVING

💸 PCE: a broad index of things that people buy 💸

The personal consumption expenditures price index, or PCE, measures the change in prices that people living in the United States pay for goods and services each month. When the cost of groceries, cars, clothes and furniture goes up, so does the PCE.

The PCE shows how spending habits change when prices fluctuate. The index is also the Federal Reserve’s preferred inflation gauge. The Fed uses core PCE, which excludes volatile food and energy prices, in deciding whether to raise or lower interest rates to help reach its annual 2% inflation target.

⛽ Gasoline ⛽

The majority of U.S. households still rely on gas-powered vehicles and what we pay at the pump can make a big dent in our budgets. Those tall price signs at gas stations serve as a daily reminder of how global energy markets influence our day-to-day spending.

🍳 Eggs 🍳

Eggs are a staple of the American diet. So when their price goes up, people tend to buy them anyway. It’s an example of how the broader economy influences “kitchen table” issues — something that even the vegans among us must contend with.

🏢 Rent 🏢

Shelter is a necessity — one that can consume a major portion of our budgets.

To get a monthly read on average rents, we are relying on Zillow, a private, for-profit provider of housing market data. Zillow combines the rental listings marketed on its site with more comprehensive annual data from the U.S. Census Bureau and some advanced statistical modeling to come up with a timely and comprehensive look at the cost of units currently available to rent, the Zillow Observed Rent Index.

🏠 Home prices 🏠

For many Americans, homes are the largest purchase they’ll make and their most valuable asset. While owning a home can be a key source of long-term wealth, rising prices make homeownership harder for first-time buyers. 

Falling prices make homes more affordable, but they can hurt property owners’ finances and weaken the real estate market. (Scroll down to see trends in mortgage interest rates, which have a strong influence on home prices.)

INTEREST RATES

In general, interest rates are what lenders charge borrowers for making a loan. They vary with economic conditions and the creditworthiness of the borrower.

🏦 Federal Funds Rate 🏦

While interest rates vary based on the type of loan, credit card or bank account you have, they tend to move in concert with the federal funds rate, the interest rate set by the Federal Reserve’s Federal Open Market Committee.

Technically, it’s the rate assigned to overnight lending among banks as they try to meet their reserve requirements. Practically, the Fed can be expected to raise the rate when inflation gets too high and lower the rate if deflation becomes a threat or the economy needs a boost.

🏘️ Home mortgage interest rate 🏘️

Mortgage rates, the interest rates on property loans, influence how much homeowners pay for what is typically their biggest monthly expense. Not only do mortgage rates help determine home affordability, they also drive economic trends.

We’re tracking the benchmark 30-year mortgage, used by about 90% of homeowners.

THE BROADER ECONOMY

🏭 Gross domestic product 🏭

Gross domestic product, or GDP, is a comprehensive measure of economic activity that represents the value of goods and services produced in the United States. The Federal Reserve and many other agencies, companies and individuals pay attention to changes in GDP as an indicator of the overall health of the economy. Common definitions of economic recession and expansion are related to changes in GDP.

📈 The stock market 📈

No, it is not the economy. But it is important — to your employer, your lender and probably your retirement account. The stock market shows the value that investors, big and small, place in companies that can be bought and sold in small portions called shares.

The value of each publicly traded company can be tracked, and it changes, usually minutely, on a trade-by-trade basis. To get at the broader trends, though, the industry puts the stock prices of many companies together in one big bundle, called an index, to see whether their amalgamated value is going up or down over time.

Generally, the higher the stock market, the better for investors and the economy at large. But, then again, watch out for those market bubbles. If values get overinflated, they are bound to pop eventually. Or at least deflate.

Although thousands of companies are publicly traded on exchanges worldwide, and companies have been combined into hundreds of different stock indexes, let’s focus on the three most widely followed indexes in the United States.

• The Standard & Poor’s 500 tracks 500 leading publicly traded U.S. companies, providing a broad gauge of the strength, or weakness, of the stock market.

• The Nasdaq Composite tracks the more than 2,500 stocks traded on the Nasdaq stock exchange (including some companies based outside of the U.S.) and is typically thought to reflect financial conditions in the high-tech sector.

• The Dow Jones Industrial Average, a venerated and long-standing index, was established in 1896. It includes 30 large, well-known, U.S.-based “blue chip” companies.

The Marketplace Dozen is produced by the APM Research Lab and is supported in part by Arizona State University’s Ten Across initiative.