What Does Employment Report in the US Mean?


The employment figures in the United States have disappointed investors, and the markets are punishing the bad data at this hour. The U.S. employment figures are decisive for the markets because they are important for the recovery of the U.S. economy.

September 3, 2021, | AtoZ MarketsJob creation for August was a huge disappointment, with the economy adding just 235,000 new jobs, the Labor Department reported. Also, the unemployment rate dropped to 5.2% from 5.4%, in line with estimates.

So far this year, monthly job growth has averaged 586,000. In August, notable job gains occurred in professional and business services, transportation, and warehousing Also, private education, manufacturing, and other services. Employment in retail trade declined over the month.

Read here the full employment report

Employment Report in the U.S.

Depending on the economic cycle in which the economy is in, the jobs reports acquire greater relevance and impact on the market.

We must always consider that employment figures are important depending on the part of the economic cycle where an economy is. For example, if we are in expansion, market fears will focus on inflation, rising wages, and prices.

On the other hand, if we are in an economic slowdown, investors will pay attention to growth, demand, and production figures.

How Is the Labor Force Measured in the United States?

The survey excludes people living in institutions (for example, a correctional institution or residential nursing or mental health care facility) and those on active duty in the Armed Forces. The survey is designed so that each person age 16 and over (there is no upper age limit) is counted and classified into only one group.

The sum of the employed and the unemployed constitutes the civilian labor force. People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, and year-round employment.

The U.S. labor market is very important to the health of the economy. More people working means more spending, more consumption, and better business.

How Is the U.S. Employment Report Presented?

It is a report presented by the Department of Labor and its Bureau of Statistics on the website:

http://stats.bls.gov

It is generally presented on the first Friday of each month and covers the previous month’s data. Periodic revisions are made every two months, and annual data are revised.

How Information Is Received

The report consists of two parts, the first is a household survey, and the other is business data. The latter figures are the ones that the markets and the Fed follow closely.

In household reporting, the government contacts 60,000 families each month, including farm and non-farm workers, employees working for their businesses, household helpers, and U.S. citizens residing in Mexico and Canada.

The reason these individuals are included in that they make tax payments to the IRS and spend their income in the United States.

Respondents are asked if they are working, whether full-time or part-time if they have been unemployed, and for how long. Ninety-five percent of respondents answer the survey, for a total of 3,000 reports that are not tabulated.

The report is presented in categories such as gender, age, ethnicity, educational attainment, and marital status.

The Figures of  U.S. Establishment Report

The report on companies is considered a more specific and concrete report on the labor reality in the country.

It is the report that the press and investors always review around the world. The Bureau of Labor Statistics (BLS) sends the information to companies with which it maintains contact.

These companies employ millions of workers at the total non-agricultural workers in the country. The information is obtained via email or by phone. All members of the workforce are accounted for in the report, the only exceptions being farmworkers, employees of their businesses, and domestic help employees.

In this report, it is also not taken into account, if the job is part-time, or full-time, the only thing that is reviewed is the number of jobs that were created during the month.

Agricultural jobs are not considered in the official figures because they are seasonal. Therefore, the population moves all the time and could be counted multiple times.

Analysis of Current Unemployment Data in the U.S.

  • Total nonfarm payroll employment rose by 235,000 in August, following increases of 1.1 million in
    July and 962,000 in June.
  • Nonfarm employment has risen by 17.0 million since April 2020 but is down by 5.3 million, or 3.5 percent, from its pre-pandemic level in February 2020.
  • Employment in professional and business services increased by 74,000 in August.
  • Transportation and warehousing added 53,000 jobs in August, bringing employment in the industry slightly above (+22,000) its pre-pandemic level in February 2020.
  • In August, employment increased by 40,000 in private education, declined by 21,000 in state government education.
  • Manufacturing added 37,000 jobs in August.
  • Employment in retail trade declined by 29,000 in August, with losses in food and beverage stores (-23,000) and building material and garden supply stores (-13,000).
  • In August, employment showed little change in other major industries, including construction, wholesale trade, and health care.

How Much Is Paid in the United States for an Hour of Work?

Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, following increases in the prior 4 months.

In August, the average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99. The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages.

The average workweek for all employees on private nonfarm payrolls was 34.7 hours for the third consecutive month. In manufacturing, the average workweek fell by 0.2 hours over the month to 40.3 hours, and overtime remained at 3.2 hours. The average workweek for production and
nonsupervisory employees on private nonfarm payrolls were unchanged at 34.2 hours.

In August, 13.4 percent of employed persons teleworked because of the coronavirus pandemic, little changed from the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic.

Important Note

The US Employment Report is very important to investors because it is the most important measure to ensure economic growth. Remember that a good employment report guarantees that the population will have the capacity to buy, save, grow and invest.

If you are a Forex trader, it is very important to closely monitor the employment report in the United States every first Friday because it determines the future of the dollar.

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