DEFINITION of 'Employment Situation Report'

A monthly report compiling a set of surveys in an attempt to monitor the labor market. The Employment Situation Report, released by the Bureau of Labor Statistics, by the U.S. Department of Labor, consists of:

  • The unemployment rate - the number of unemployed workers expressed as a percentage of the labor force.
  • Non-farm payroll employment - the number of employees working in U.S. business or government. This includes either full-time or part-time employees.
  • Average workweek - the average number of hours per week worked in the non-farm sector.
  • Average hourly earnings - the average basic hourly rate for major industries.

BREAKING DOWN 'Employment Situation Report'

The reaction in the market to this indicator is dramatic, which makes this information invaluable for investors. The data provides investors with knowledge beyond the headline unemployment rate, and let's them know what the workers in the nation are making and how long they are working.

These statistics provide insight into the direction of wage and employment trends. Both can have an effect on wage inflation, which will cause the Fed to raise rates to curtail. Raising interest rates will have a negative effect on bond and equity markets. Alternatively, if wage inflation seems to be decreasing, the Fed may lower rates, which would have positive effects in the markets.

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RELATED FAQS
  1. How does the Bureau of Labor Statistics determine the unemployment rate?

    Learn how estimates of the unemployment rate are made based on monthly surveys of American households that are conducted ... Read Answer >>
  2. How does the U.S. Bureau of Labor Statistics calculate the unemployment rate published ...

    Understand the process used by the U.S. Bureau of Labor Statistics to determine the official unemployment rate for the United ... Read Answer >>
  3. What does the Bureau of Labor Statistics do?

    By collecting, analyzing and reporting on important economic data, the Bureau of Labor Statistics has become a critical information ... Read Answer >>
  4. Is the Bureau of Labor Statistics accurate?

    Read this brief analysis of the accuracy of Bureau of Labor Statistics, including a summary of the types of reports issued ... Read Answer >>
  5. What impact does a higher non-farm payroll have on the forex market?

    Traders are constantly monitoring various economic indicators to identify trends in economic growth. Some of the most watched ... Read Answer >>
  6. What are some of the key shortcomings of how the U.S. unemployment rate is determined ...

    Understand how the unemployment rate reported by the BLS fails to account for people who have given up looking for jobs or ... Read Answer >>
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