Employment Situation aka Jobs Numbers
Contents
The "jobs numbers report" is the common name for the official monthly report on the U.S. labor market. Its formal name is The Employment Situation, and it's one of the most closely watched economic indicators.
This report is released by the Bureau of Labor Statistics (BLS), an agency within the U.S. Department of Labor, usually on the first Friday of each month. It provides a comprehensive and timely snapshot of the health of the U.S. economy.
Key Components of the Report
The Employment Situation report is based on two separate surveys:
| 1. | The Household Survey (Current Population Survey - CPS): |
| o | This survey of approximately 60,000 households is used to determine the unemployment rate. |
| o | It measures the labor force, including who is employed, unemployed, or not in the labor force. |
| o | It provides a look at the characteristics of the employed and unemployed by demographics like age, sex, race, and ethnicity. |
| 2. | The Establishment Survey (Current Employment Statistics - CES): |
| o | This is a payroll survey of approximately 144,000 businesses and government agencies. |
| o | Its most-watched figure is the change in "nonfarm payroll employment," which represents the net number of jobs gained or lost in the previous month. This number is often the headline of the report. |
| o | It also provides data on average hourly earnings, average weekly hours, and the number of jobs by industry. |
Why is it so important?
The jobs report is a major market-moving event because it gives a clear indication of the economy's direction. It is a key factor for:
| • | The Federal Reserve: The Fed uses the report's data on employment and wages to help guide its monetary policy decisions, particularly on interest rates, as it has a dual mandate to promote maximum employment and price stability. |
| • | Policymakers: Government officials use the data to assess the effectiveness of economic policies. |
| • | Investors: Financial markets react strongly to the report's findings, as it can signal whether the economy is growing or slowing down, which in turn can affect corporate earnings and asset prices. |
| • | The Public: It provides individuals with an understanding of the overall economic climate and labor market conditions. |