How to Read the Monthly Jobs Report

Few economic releases get as much attention as the monthly jobs report. Stock and bond markets can swing within minutes of its release, the Federal Reserve studies it closely when setting interest rates, and job seekers watch it for clues about where opportunities are growing. Yet the report is packed with numbers that can be confusing at first glance. Here’s how to make sense of it.

What the jobs report is

The official name is the Employment Situation report, and it’s published by the U.S. Bureau of Labor Statistics, part of the Department of Labor. It’s usually released at 8:30 a.m. Eastern time on the first Friday of each month and covers the previous month. Occasionally the schedule shifts because of holidays or other factors, and the BLS publishes its release calendar in advance.

Two surveys, two perspectives

The jobs report is built from two separate surveys, which is why it sometimes seems to tell slightly different stories.

The establishment survey, also called the payroll survey, asks a large sample of businesses and government agencies how many people are on their payrolls. It produces the headline nonfarm payrolls number, which shows how many jobs were added or lost. It also provides data on hours worked and earnings, broken down by industry.

The household survey asks a sample of households about the work status of their members. It produces the unemployment rate and information about who is working, looking for work or not in the labor force, along with demographic details. Because it surveys households rather than employers, it captures self-employed workers that the payroll survey misses.

The key numbers to watch

Nonfarm payrolls is the headline figure: the net number of jobs added or lost across the economy, excluding farm workers, private household employees and a few other groups. A positive number means employers added jobs on net, while a negative number means they cut them.

The unemployment rate is the share of people in the labor force who don’t have a job but are actively looking for one. People who aren’t looking for work, such as retirees or full-time students, aren’t counted in the labor force and don’t affect the rate.

Average hourly earnings measures how much workers are paid per hour on average, offering a view of wage growth. Economists compare wage growth with inflation to see whether workers’ purchasing power is rising or falling.

The labor force participation rate is the share of the working-age population that is either working or looking for work. Changes in participation can affect the unemployment rate in ways that aren’t obvious. If discouraged workers stop looking for jobs, for example, the unemployment rate can fall even though no one found work.

Watch the revisions

Each jobs report revises the payroll numbers for the previous two months as more complete data arrives from employers. Revisions can be large enough to change how strong or weak the job market looks. In addition, the BLS conducts an annual benchmark revision that aligns payroll estimates with more comprehensive records.

Because of revisions, economists often focus on the three-month average of job gains rather than a single month, which smooths out noise and gives a clearer sense of the trend.

Look at the details by industry

The headline number can hide important differences. The report breaks down job gains and losses by industry, such as health care, construction, manufacturing, retail, leisure and hospitality, and government. Looking at which sectors are growing or shrinking can tell you a lot about where the economy is headed and where job opportunities may be.

Why markets and the Fed care

The Federal Reserve has a dual mandate: maximum employment and stable prices. The jobs report is one of the most important measures of the employment side. A very strong report with rapid wage growth may make the Fed more cautious about inflation, potentially keeping interest rates higher. A weak report may increase expectations of rate cuts.

That’s why markets react quickly. Stocks, bonds and mortgage rates can all move on jobs data, sometimes in ways that seem counterintuitive, such as stocks rising on a weak report because investors expect lower rates.

What it means for you

A strong report may mean more job openings and better bargaining power for workers, which can be a good time to ask for a raise or look for a new role. But it can also influence the Fed to keep rates higher, which affects borrowing costs on mortgages, car loans and credit cards.

A weak report may signal a slowing economy. If several weak reports appear in a row, it’s a good moment to strengthen your emergency fund, update your résumé and keep your professional network active.

Remember that national numbers may not reflect your local market or your specific field. The BLS also publishes state and metro-area employment data, which can offer a closer look at conditions where you live.