What Is the Employment Situation Report?
The Employment Situation Report contains the most significant data about the job market in the USA. It is also known as the Jobs Report.
The Bureau of Labor Statistics (BLS) releases this report on the first Friday of every month. It provides the employment data in solid numbers and compares them with the previous month’s data.
The Employment Situation Report includes two separate reports: the Establishment Survey, and the Household Survey.
The Establishment Survey is also known as the Payroll Survey and the Current Employment Statistics (CES). It collects data from around 131,000 businesses and government agencies representing about 670,000 work sites.
The Household Survey is also known as the current population survey (CPS). It surveys around 60,000 eligible households across demographics to track job trends.
In short, this report includes the following four critical data:
- Nonfarm Payrolls: indicating the number of new jobs created in the USA excluding agricultural industry, non-profit organizations, and some other stable jobs.
- Unemployment Rate: indicating the percentage of people who have no jobs and are looking for new jobs.
- Average Hourly Earnings: indicating salary and wages paid to employees on average.
- Labor Force Participation Rate: indicating the percentage of employed and unemployed people in relative to the total working-age population.
The Significance of the Employment Situation Report
The Jobs Report includes three significant economic indicators of the USA: nonfarm payrolls, the unemployment rate, and the average hourly earnings.
The nonfarm payrolls data indicates the number of new jobs created in the US economy in the given month relative to the previous month. This indicator excludes jobs created or lost in the agricultural industry, non-profit organizations, and some other governmental agencies such as military active personnel. But, still includes around 80% of jobs in the USA. It is the huge percentage of jobs in the economy that makes it important. Often, the nonfarm payrolls data release shakes the Forex and the stock market.
Employment is one of the most important things that everyone thinks about. The unemployment rate indicates the percentage of unemployed people who are willing, seeking, and ready to accept jobs. Employment enables consumers to buy goods and services. When the unemployment rate increases, it increases the consumers’ consumption followed by economic growth or GDP.
The average hourly earnings indicator expresses the salary and wage changes that can help to gauge personal income.
The labor force participation indicates the percentage of the producing population. This indicator does not change very rapidly. However, a positive change makes the burden of working people lighter in supporting the non-productive part of the population.
Trading Employment Situation Report
Among the data released in this report, the nonfarm payroll and the unemployment rate have the most impacts.
Often, the nonfarm payrolls move the USD currency pairs immediately. And even may reverse the trend at least for the short-term.
Scalpers react to these data instantly. That is why we see volatilities after the release. However, to minimize risks, pro investors take into account other economic indicators and chart patterns too.
It is always a good idea to consider both technical and fundamental analysis to make a better decision.
Overall, a positive reading than expected can have a positive impact on the USD quotes and the US stock market. And the opposite may happen if the reading is lower than expected.
Final Words
The jobs report is officially known as the employment situation report. It includes three significant economic data: employment, nonfarm payrolls, and hourly earnings.
The release of this report often immediately impacts the USD currency pairs and possibly the stock market.
