What is Jobs Growth?
Jobs growth is a statistic that is published and measured by the United States Bureau of Labor Statistics. It measures the amount of new nonfarm payroll employment created monthly in the U.S. The statistic is reported in an employment situation summary, published by the Bureau of Labor Statistics.
The summary also contains explanations for where most of the job gains were realized, where jobs lost are arising from, and where unemployment is stemming from. Further, a demographic and industry breakdown of unemployment is also provided; demographics are broken down to age, sex, and race.
The employment situation summary may also include estimates or sentiment on how current or upcoming events may impact the employment estimates. Additionally, it provides information on the number of hours the average private nonfarm employee works during a workweek for the given month.
The summary also discusses the number of persons temporarily laid off, long-term unemployed persons, and the labor force participation rate, in addition to the number of full-time and part-time employment. All information provided in the employment situation summary helps provide an accurate view of the employment and jobs growth situation in the United States.
How is Jobs Growth Measured?
The Bureau of Labor Statistics gathers data from two surveys to formulate their statistics; the two surveys are the Current Employment Statistics (CES) and Current Population Surveys (CPS). Data from the CES provides information on nonfarm payrolls’ employment, hours worked, and earnings. Data from the CPS gathers information on employment, unemployment, and the labor force.
The CPS survey data is a sample that is selected to accurately represent the entire noninstitutional civilian population that is over the age of 16. The CES survey draws information from nonfarm private businesses like stores and offices and all three levels of government entities (federal, state, and local).
Additionally, farm and agricultural job statistics are not included in the jobs growth data because of the cyclical nature of farming and agricultural businesses. However, the CPS survey includes agricultural workers, in addition to self-employed workers with unincorporated businesses.
Another key difference between the CPS and CES is that workers are not double-counted in the CPS survey; if an individual holds multiple jobs, appearing on multiple payrolls, they would be counted multiple times in the CES survey. Industry statistics provided in the employment situation summary are classified based on the establishment’s main activity; this is in line with the North American Industry Classification System (2017).
What is the U.S. Bureau of Labor Statistics?
The U.S. Bureau of Labor Statistics is a branch of the U.S. Department of Labor and is also known as the principal fact-finding agency of the United States. Commissioned by William W. Beach, the Bureau of Labor Statistics measures price changes, productivity in the U.S. economy, labor market activity, and working conditions.
The bureau’s values revolve around providing just the facts, being fully transparent, providing accurate data, using customer input, valuing customer service, and striving for innovation. It employs 2,400 individuals, around half of which are statisticians and economists.
Jobs Growth and Monetary Policy
Jobs growth data reported by the Bureau of Labor Statistics plays an important role in formulating the monetary policy of the United States. The U.S. monetary policy is controlled by the Federal Reserve System. One of the five functions of the Federal Reserve System is to promote maximum employment.
If the statistics published by the federal government show a dim picture for jobs growth and employment in the United States, the Federal Reserve System may employ an expansionary monetary policy strategy. The strategy may include open market operations by the Federal Open Markets Committee, including increasing the money supply and/or decreasing the federal funds target rate.
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