User:Dulac1984/sandbox/U.S. Employment Index
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U.S. Employment Index
The U.S. Employment Index ("USEI") monitors the relative changes to 10 inputs that reflect the overall conditions of the United States employment market. The USEI is a sub-index of the US Commercial Real Estate Index and is released weekly. Data is updated in the USEI as soon as it is available from the public sources. The data components are released at different points of each calendar month. Therefore, the index is published weekly using "latest available" data. The 10 components are from a variety of economic drivers behind the employment market and are displayed below.
The sources of the data and the frequency of releases are listed in the table below.
| Index Input | Data Source | Frequency |
|---|---|---|
| Unemployment Rate | US Bureau of Labor Statistics | Monthly |
| Non-Farm Payroll | US Bureau of Labor Statistics | Monthly |
| ADP Employment Figure | ADP | Monthly |
| Construction Employment | US Bureau of Labor Statistics | Monthly |
| Part Time Employment for Economic Reasons | US Bureau of Labor Statistics | Monthly |
| Job Openings | US Bureau of Labor Statistics | Monthly |
| New Hires | US Bureau of Labor Statistics | Monthly |
| Separations | US Bureau of Labor Statistics | Monthly |
| Average Weekly Earnings | US Bureau of Labor Statistics | Monthly |
| 4 Week Average of Initial Unemployment Claims | US Department of Labor | Weekly |
The Index Concept[edit]
An Index[1] is a useful tool for synthesizing a large amount of data inputs into a single number that can be included in a time series for analysis. The U.S. Employment Index synthesizes 10 data points from publicly released data and has an inception date of December 31, 2000.
An index can have an arbitrary starting point and an arbitrary starting value. The USEI has a starting value of 100 and is expressed in values rounded to two decimal points. The starting date was strategically selected as of the end of 2000 due to the timing of economic cycles[2]. In the graph below from the Federal Reserve Bank of St. Louis[3], the start and end of the two most recent economic cycles can be seen in a graph of US Unemployment Rate data. Note that the starting and ending dates of the two recessions (highlighted in grey with red boxes) were determined by the National Bureau of Economic Research (NBER).
The purpose of choosing to start the index at the end of 2000 was due to the fact that this stating point is very close to the peak of an economic cycle prior to the recession that occurred during the eight month period spanning March of 2001 through November of 2001. Also, due to the length of the datasets supporting the USEI, the effect of two full economic cycles can be observed.
The USEI is designed to reflect change in the inputs since the inception of the index. Inputs can be negatively or positively correlated to the index. For example if the US Unemployment Rate rises, this would be considered to negatively impact the commercial real estate market[4]. Accordingly, if the US Unemployment Rate were to rise, it would have a negative impact on the USEI. Conversely, if the US Unemployment Rate were to fall this would have a positive impact on the index. On the other hand, the level of incomes in the US would be positively correlated to the index[5].
Index History[edit]
A graph of historical index values spanning the period covering December of 2000 through June 2015 is displayed below.
The impact of the 2008 recession is evident as the unemployment rate reached double digits before recovering. Overall, as of mid-2015, the index is slightly below the initial index levels recorded at the end of 2000.
The US Commercial Real Estate Index and Its Components[edit]
As mentioned earlier, the U.S. Employment Index is a member of a family of sub-indices that comprise the US Commercial Real Estate Index. In addition to the USEI, the other sub-indices include the following:
- U.S. Commercial Real Estate Price Index
- U.S. Credit Index
- U.S. Consumer Confidence Index
- U.S. Housing Index
- U.S. Inflation Index
- U.S. Income Index
- U.S. Retail Index
References[edit]
- ^ "A statistical measure of change in an economy or a securities market." - Investopedia - http://www.investopedia.com/terms/i/index.asp
- ^ Wikipedia - Business Cycle - https://en.wikipedia.org/wiki/Business_cycle
- ^ https://research.stlouisfed.org/fred2/series/UNRATE/
- ^ "How Does Unemployment Affect the Real Estate Market" http://www.ireachcontent.com/news-releases/how-does-unemployment-affect-the-real-estate-market-185576402.html
- ^ Wikipedia - Real Estate Economics - Demand for Housing https://en.wikipedia.org/wiki/Real_estate_economics
External links[edit]
- Commercial property
- Index (economics)
- Labor economics and statistics
- Bureau of Labor Statistics
- Department of Labor of the United States of America
- Real estate appraisal
- Real estate pricing
- Quantitative Easing
- Capital gains tax in the United States
- Interest rate targeting
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Category:Real estate indices Category:Commercial real estate Category:Real estate Category:Economic indicators