Finance 411: How to Report on Employment in the US
By Paddy Hirsch
The best place to start is with The Employment Situation, released by the Bureau of Labor Statistics (BLS) at 8:30 a.m. ET on what is usually the first Friday of every month. The schedule is easily accessible on the BLS website.
The BLS gets its data from two sources: the establishment survey, which gets monthly reports from the private sector and government employers, and the household survey, which is a poll of 60,000 households about their employment status during the reference week.
The BLS spends the next three weeks crunching those survey numbers and releases a welter of information on the jobs situation, led by two key data points.
First, non-farm payroll employment (NFP). This tells us how many jobs in the private sector and government agencies were added or lost during the period.
Next, the unemployment rate. This data point comes from the household survey, and tells us the proportion of the labor force that is not currently employed but could be, and how that compares to the previous month.
These are the so-called headline numbers, which are closely watched by everyone from the lowest bond trader to the chair of the Federal Reserve. But reporters need to be aware of a couple of issues with these data points.
The issue with the NFP is that it only factors in about 80 percent of the jobs that contribute to US GDP. The NFP excludes farm workers, private household employees, self-employed proprietors — which includes many gig workers — and non-profit employees. They’re excluded because it is administratively burdensome to get consistent, accurate numbers on these seasonal, highly variable jobs. The military is also excluded because military employment changes primarily based on the need for national defense, not the economy’s performance. So the NFP is not the whole picture. And as the workplace changes and the number of people working in the gig economy rises that picture becomes increasingly distorted.
The issue with the headline unemployment rate is that it is just one of several unemployment rate numbers generated by the BLS — and a lot of people don’t consider it an accurate representation of the unemployment situation. It’s called the U-3 report, and it defines unemployed people as “those who are willing and available to work and who have actively sought work within the past four weeks.” The thing about U-3 is that it excludes people who want to work but can’t — due to a disability, for example — or who have become discouraged after looking for work without success. They are categorized as outside the labor force. Critics say this makes the U-3 data misleading. The BLS compensates for this by providing five other data points in the body of its report. That includes the most comprehensive, U-6 unemployment.
So those are the headlines. But apart from those two numbers, the monthly Employment Situation report contains a plethora of other indicators that can be useful to reporters for daily coverage. The report breaks down the unemployment situation to show which worker groups are most affected. It tells us the number of long-term unemployed. It has granular data on which sectors of the economy gained or lost jobs. It can tell us what the average American job pays hourly, and it can tell us the length of the workweek, and whether or not that has changed over the month.
The Employment Situation isn’t the only report released by the BLS during the month. It produces briefings on Job Openings and Labor Turnover, worker Productivity and Costs, workers’ Real Earnings and Employee Benefits. It also generates annual reports on Unpaid Eldercare, Fatal Occupational Injuries, and my personal favorite, the Work Experience of the Population, a kind of roundup of a year’s worth of Employment Situation reports.
In other words, there is a wealth of jobs data beyond the headline numbers in the BLS monthly jobs report. If reporters look beyond those headlines, and deep into the BLS data, they’ll find dynamite for good reporting on the job situation in America. Then it’s simply a matter of finding some of the people who do those jobs and talking to them.
Patrick Hirsch is a Freelance Reporter for NPR. He can be reached at email@example.com and their website is www.paddyhirsch.com. Finance 411 is a bi-monthly feature, presented by RTDNA and the National Endowment for Financial Education. Interested in becoming a contributor? Email firstname.lastname@example.org for more information.