US Jobs Data: Understanding the Diverse Reports That Shape Markets
Understanding US jobs data is crucial for markets as it influences household income, consumer spending, wage growth, and inflation. The Federal Reserve considers employment when setting monetary policy, which affects Treasury yields, the dollar, equities, and borrowing costs.
The release of various jobs reports can be confusing, but each measures a different aspect of the labor market. Initial jobless claims, released weekly, count new applications for unemployment benefits, indicating layoffs. Continuing claims provide clues about how difficult it is for someone who loses a job to get back into work.
Nonfarm payrolls, or NFP, are part of the Bureau of Labor Statistics' monthly Employment Situation report and are closely watched by Wall Street. However, even the jobs report contains two major surveys: the establishment survey measures payroll employment, hours, and earnings at businesses and government agencies, while the household survey measures whether people are employed, unemployed, or outside the labor force.
ADP's National Employment Report uses anonymized payroll records to estimate changes in private-sector employment. JOLTS (Job Openings and Labor Turnover Survey) looks inside the machinery of the jobs market: vacancies, hires, quits, layoffs, and other separations. These reports provide a more nuanced understanding of the labor market.