Investors should follow the Bureau of Labor and Statistics report

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The Bureau of Labor and Statistics jobs report: Investor takeaways (Part 2 of 7)

(Continued from Part 1)

The BLS Employment Situation Report

The BLS Employment Situation Report is an economic indicator published by the Bureau of Labor and Statistics that’s released on the first Friday of every month at 8:30 AM EST.

The employment situation is a set of labor market indicators based on two separate surveys in this one report.

The Household Survey

The unemployment rate equals the number of unemployed persons divided by the total number of persons in the labor force. The survey is populated by interviewing 60,000 households. Workers are only counted once, no matter how many jobs they have, or whether they’re only working part-time. In order to be counted as unemployed, a person must be actively looking for work.

Changes in the number of unemployed people in the United States as well as the number of new jobs created are key outputs of this report. Other popular figures from the Household Survey include the labor supply and discouraged workers.

The Establishment Survey

This survey of over 557,000 worksites provides additional indicators. Non-farm payroll employment is the most popular and well-known indicator from this survey. Business establishments in the non-farm sector report the number of workers currently on their payrolls. Double-counting occurs when individuals hold more than one job. Workers on strike during the relevant week aren’t included in the figures.

So the average number of hours worked each week as well as the average compensation earned by employees during those hours are key outputs of this report.

The average workweek is a leading indicator of employment, as businesses tend to adjust total hours worked by increasing or decreasing the work week in response to economic scenarios before hiring someone new or laying someone off.

Average hourly earnings are monthly payroll figures reported before deductions for taxes, social insurance, and fringe benefits. They include pay for overtime, holidays, vacation, and sick leave. These figures come from the Establishment Survey.

Industrial companies, as major contributors to the job market, are greatly affected by employment statistics. Industrial ETFs like the SPDR Industrial Select Sector Fund (XLI), which has companies like General Electric Co. (GE) and Boeing Co. (BA) in its portfolio, the Vanguard Industrials Index Fund (VIS), and the iShares Dow Jones US Industrial Sector Index Fund (IYJ) serve as a good indicator of the industrial sector.

Continue to Part 3

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