The unemployment rate is one of the most closely followed indicators used by businesses, investors and private citizens to gauge the state of the U.S. economy.
We track the US Unemployment Rate to get a snapshot of how the economy is performing. When the rate is decreasing, we can see the market is stronger and we can expect more demand for steel. When it is increasing, we know the market is weakening, production will slow and demand for steel may go down.
With low unemployment, wages often rise as demand for workers and competition for labor increases. This holds true for the steel market, however labor averages ~ 2.5% of the steel making cost making it a relatively small factor.
The significant effects for steel with low unemployment rates include: labor shortages, diminished production and productivity, product shortages, and higher prices.
Unemployment rate trends give us great insight into how the market is performing and where it may be heading.
US Unemployment Rate