The Jobs Report: Payrolls, Unemployment and Wages

Before you read: Inflation Reports: CPI, PCE and PPI Explained

What you will learn

• What the monthly US Employment Situation report contains.
• Why the payrolls figure and the unemployment rate come from two different surveys.
• What revisions, average hourly earnings and weekly jobless claims add.

What is in the jobs report?

What single report do many traders mark on their calendars every month?

The Employment Situation report is published by the US Bureau of Labor Statistics, usually on the first Friday of the month at 8:30 a.m. Eastern Time, covering the previous month. Its main figures are:

• Nonfarm payrolls: the change in the number of jobs, excluding farm workers, private household employees and some others.
• Unemployment rate: the share of the labor force without a job and looking for one.
• Average hourly earnings: a measure of wage growth.
• Labor force participation rate: the share of the civilian noninstitutional population age 16 and older (everyone except active-duty military and people in institutions such as prisons or nursing homes) that is working or looking for work.
• Average weekly hours.

Two surveys diagram

Illustrative diagram constructed for teaching. Not real market data.

The diagram shows a fictional jobs report split into its two sources: the establishment survey producing payrolls and hourly earnings, and the household survey producing the unemployment rate and participation, with a revision arrow on the earlier payroll months. It is constructed for teaching and is not real market data.

Why are there two surveys?

Can payrolls rise while the unemployment rate also rises?

Yes, because the figures come from different surveys:

• The establishment survey asks a large sample of businesses and government agencies how many people are on their payrolls. Payrolls and earnings come from here.
• The household survey asks a sample of households about the work status of their members. The unemployment rate and participation come from here.

The surveys use different samples and definitions. One person with two jobs counts twice in the establishment survey and once in the household survey, and self-employed people with unincorporated businesses appear only in the household survey. Over a single month they can point in different directions.

How is the unemployment rate calculated?

Who counts as unemployed?

Unemployment rate = unemployed ÷ labor force. In the US household survey, the labor force is everyone age 16 and older, outside the military and institutions, who is employed or unemployed. Unemployed means without work, available, and actively looked for work in the past four weeks. One exception: people on temporary layoff who expect to be recalled count as unemployed even if they are not looking. People who have stopped looking, including discouraged workers, are not in the labor force. So the unemployment rate can fall because people stopped looking, not only because they found jobs. Broader measures are also published in the report. The broadest, U-6, adds discouraged and other marginally attached workers and people working part time for economic reasons.

Example. A fictional labor force of 160 million with 6.4 million unemployed has an unemployment rate of 4.0%.

Three fictional people show how the household survey sorts cases. Ana was laid off last week and expects to be recalled next month: unemployed, even though she is not searching. Ben wants a job and looked earlier this year, but has not looked in the past four weeks because he believes none are available: a discouraged worker, not in the labor force. Cara works 10 hours a week but wants full-time work and cannot find it: employed, and counted in U-6 as part time for economic reasons.

What are revisions?

If last month’s number changes, which number did the market react to?

Payroll figures for the previous two months are revised in each report as more survey responses arrive, and an annual benchmark revision lines the data up with more complete records. Revisions can be large compared with the headline change. A strong headline with large downward revisions to earlier months tells a different story from the headline alone.

What about weekly jobless claims?

Is there a labor market number that comes out more often?

The US Department of Labor publishes initial jobless claims every Thursday, usually at 8:30 a.m. Eastern Time. Claims count new applications for unemployment insurance and give a more frequent, though noisy, read on layoffs. Many readers watch a four-week average.

Why do markets react?

What does a strong jobs report mean for interest rate expectations?

Labor data feeds into expectations for growth and for central bank policy, since maximum employment is part of the Fed’s mandate. Readings far from the consensus estimate, especially for payrolls and wages, can move yields, the dollar and stock index futures quickly. Moves in the first minutes can be large and can reverse.

What this does not tell you about the jobs report

• What any report will show or how markets will react.
• Exact release dates, which the BLS publishes in its schedule and can change.
• The health of any one industry or region in detail. The report includes industry tables for that.
• Nothing here suggests trading on any release.

Method in Practice: a worked example for this topic, with John’s plan and three replays, is in Inflation Reports: CPI, PCE and PPI Explained.

Check yourself

1. Which survey produces the payrolls number? Hint: it asks employers.
2. A fictional labor force is 150 million with 6 million unemployed. What is the unemployment rate? Hint: divide.
3. Why can the unemployment rate fall without more people working? Hint: who stops counting as part of the labor force?

Last reviewed November 8, 2026. Spotted a mistake? Report an error.