Jobs report: Explained


The jobs report is released on the first Friday of every month by the Bureau of Labor Statistics to paint a picture of just how well the overall United States economy is doing.

The primary data points that investors focus on are: How many jobs were created, the unemployment rate, and wage growth. Ross Mac of Macenomics joins Yahoo Finance to break down the jobs report.

Non-farm payrolls (00:00:24)

Non-farm payrolls monitor full and part-time job creation, while excluding seasonal jobs, like farmers.

Unemployment rate (00:00:33)

The unemployment rate is the total number of people in the workforce that don’t actually have jobs who are out actively looking for one.

Wage rate (00:00:40)

The average hourly earnings, or wage rate, measures how much workers earned in each respective industry.

Why does this actually matter? (00:00:46)

Well, it directly impacts everything from policy decisions in Washington, D.C., to the interest rates on your loans, and even the stock market performance. For instance, a surge in employment is going to suggest businesses are booming, possibly leading to higher incomes and overall consumer confidence.

But now on the flip side, if unemployment actually ticks up, it might signal economic trouble is ahead.

However, when job growth is a little too rapid, it can also signal inflation, possibly affecting everything from your mortgage rate to the cost of your groceries.

Look, this report gives us valuable insight and over the long term, as unemployment falls, the stock market tends to go higher.

Video Transcript

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ROSS MAC: Hi. Did you know the US economy gets a monthly report card? Yep, and it’s called the jobs report. And it’s released on the first Friday of every month by the Bureau of Labor Statistics to paint a picture of just how good the overall economy is doing.

Now, look the primary data points that investors focus on how many jobs were created, the unemployment rate, and wage growth. Now, let me break all that down for you.

Now, first things first, you’ve got non-farm payrolls. And that’s going to monitor full and part-time job creation while excluding seasonal jobs, like farmers.

Now secondly, you got the unemployment rate. Now that’s the total number of people in the workforce that don’t actually have jobs who are out actively looking for one.

And lastly, you got the average hourly earnings or wage rate and that’s going to measure how much workers earn in each respective industry.

Now, you got to ask the question, why does this actually matter? Well, it directly impacts everything, from policy decisions in Washington DC, to the interest rates on your loans, and even the stock market performance. For instance, a surge in employment, that’s going to suggest businesses are booming, possibly leading to higher incomes and overall consumer confidence.

But now on the flip side, if unemployment actually ticks up, it might signal economic trouble is ahead. However, when job growth is a little too rapid, it can also signal inflation, possibly affecting everything from your mortgage rate, to the cost of your groceries.

Look, guys, this report gives us valuable insight, and over the long term as unemployment falls, the stock market, it tends to go higher. It’s your boy Ross Mac, and this is Maconomics for Yahoo Finance.

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