How to Read the Monthly Jobs Report: The Numbers That Actually Matter
The jobs report moves markets and headlines every month. Here is what each number measures, which ones matter if you are looking for work, and why the first figure is often revised.
Every month, one government release sets the tone for how people talk about jobs: the Employment Situation report from the US Bureau of Labor Statistics (BLS). News coverage usually boils it down to a single number. That number is only part of the story, and it is not always the part that matters most if you are trying to get hired.
Here is what is actually in the report, how to read it, and which figures to watch.
Two surveys, two different questions
The jobs report is built from two separate surveys that ask different questions of different people.
The establishment survey asks employers how many people are on their payrolls. It covers a large sample of businesses and government agencies. This is where the headline "employers added X jobs" comes from, along with average hourly earnings and average weekly hours.
The household survey asks a sample of about 60,000 households about the people who live there: whether they worked, whether they looked for work, and why. This is where the unemployment rate and the labor force participation rate come from.
Because the surveys measure different things, they can point in slightly different directions in any one month. That is normal. Over several months they usually tell a consistent story.
The headline number: nonfarm payrolls
"Nonfarm payrolls" is the change in the number of jobs on employer payrolls, excluding farm work, private household employees and a few other categories. A positive number means employers in total added jobs. It counts jobs, not people, so someone with two jobs counts twice.
Look past the total to the industry breakdown. A month where most gains come from one sector, such as healthcare or government, tells you something different from a month where hiring is spread across many industries.
The unemployment rate
The official unemployment rate, sometimes called U-3, is the share of the labor force that has no job and has actively looked for one in the past four weeks. People who are not looking, such as retirees or full-time students, are not in the labor force at all and do not count as unemployed.
That definition matters. The rate can fall because people found jobs, or because people gave up looking and left the labor force. To tell the difference, check the labor force participation rate in the same report.
For a wider view, BLS also publishes U-6, which adds people who are working part time but want full-time work, and people who want a job but have stopped searching. When U-6 is much higher than the official rate, there is more slack in the job market than the headline suggests.
Wages and hours
Average hourly earnings shows how pay is moving for workers on payrolls. Compare the year-over-year change with inflation to see whether pay is actually gaining ground.
Average weekly hours is an underrated signal. Employers often cut or add hours before they cut or add people, so a steady decline in hours can be an early warning.
Revisions: why the first number is not the final number
The first payroll estimate is based on the employer responses BLS has received by its deadline. As more responses come in, BLS revises the previous two months in each new report. Once a year it also benchmarks the data against more complete employment records.
Revisions can change the picture. A month that looked strong at first can be revised down, and the reverse also happens. When you read a new report, read the revisions to the two prior months as carefully as the new number.
What job seekers should watch
If you are looking for work, a few other figures are often more useful than the headline:
- Job openings, hires and quits. These come from a separate BLS survey, the Job Openings and Labor Turnover Survey (JOLTS), released about a month later. A high quits rate usually means workers feel confident they can find something better.
- Industry detail. Whether your own industry is adding or shedding jobs matters more to you than the national total.
- Long-term unemployment. The household survey reports how many people have been unemployed for 27 weeks or more. A rising share signals that it is taking longer to find work.
- Local data. State and metro area figures arrive later in the month and can differ sharply from the national picture.
The bottom line
One month of data is noisy. Look at the three-month average for payrolls, read the revisions, and pay attention to openings, quits, wages and hours. Together they give a far clearer picture of whether it is getting easier or harder to find a job.
Frequently asked questions
When is the jobs report released?
The Bureau of Labor Statistics usually publishes the Employment Situation report on the first Friday of each month at 8:30 a.m. Eastern time. The schedule can shift around holidays, and BLS publishes the full release calendar in advance.
Why do the payroll numbers change after they are published?
The first estimate is based on the employer responses received by the deadline. As more employers report, BLS revises the figures for the prior two months, and it benchmarks the data once a year against more complete records.
What is the difference between U-3 and U-6 unemployment?
U-3 is the official unemployment rate: people without a job who looked for work in the past four weeks. U-6 is broader. It also counts people working part time who want full-time work and people who want a job but have stopped looking.