Jobs Growth: Overview and Applications

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Updated April 08, 2024
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What Is Jobs Growth?

Jobs growth is measured in the U.S. by the number of employees added to nonfarm payrolls monthly, as reported by the Bureau of Labor Statistics (BLS). It is a key indicator of the pace of economic expansion. Nonfarm payrolls are part of the Employment Situation Summary published by the BLS, the widely followed statistical release better known as the monthly jobs report.

Key Takeaways

  • Jobs growth is measured by the monthly change in nonfarm payrolls as reported by the U.S. Bureau of Labor Statistics.
  • Jobs growth figures are released monthly and are subject to revisions over the next two months as additional survey results are collected.
  • These figures often move financial markets as one of the most important and timely economic indicators.
  • Farm employment and agricultural jobs aren't included in these calculations.

Understanding Jobs Growth

Jobs growth refers to the net increase in the number of nonfarm payrolls during the previous month. This number is widely followed because employment is crucial for economic performance. Bigger gains suggest growth above the trend, while smaller ones or outright losses may signal a slowdown.

That said, it is important to remember that the jobs growth numbers in the Employment Situation Summary are estimates. The numbers for a given month are revised in each of the next two monthly reports based on additional survey submissions. A monthly nonfarm payroll increase of about 130,000 is considered statistically significant.

303,000

The increase in total U.S. non-farm payroll employment in March 2024. The unemployment rate, derived from a separate survey, remained unchanged from the previous month at 3.8%.

How Jobs Growth Is Measured

The BLS compiles job growth data by surveying about 122,000 businesses and government agencies accounting for about 20% of total U.S. nonfarm employment. The Employment Situation Summary provides data from this "establishment survey" tracking nonfarm employment by industry as well as a separate household survey of employment status. The two surveys provide headline-making figures on job growth and unemployment.

Although nonfarm payrolls are subtotaled by industry, the most commonly reported number is the net change in U.S. payrolls from the preceding month, which estimates the number of jobs added outside the agricultural sector. Farm employment is excluded from the establishment survey because it is too seasonal and harder to estimate.

Because of how important it is to the economy, jobs growth is closely watched by the Federal Reserve as it makes changes to its monetary policy.

How Jobs Growth Is Used in Investing

As a comprehensive measure of U.S. employment and one of the earliest economic reports for a given month, the Employment Situation Summary often moves financial markets. In addition to tallying nonfarm payrolls, the establishment survey estimates average weekly hours worked—a measure of labor demand—as well as average hourly earnings, an early indicator of labor cost inflation.

Because of the report's importance to investors and policymakers, traders compare the numbers in it to the consensus of analysts' forecasts to get an early sense of whether, for example, nonfarm payroll gains in the latest month exceeded or trailed market expectations.

Since the numbers fluctuate from month to month and are subject to significant revisions, it takes more than a single report to establish a trend. Investors must also consider this metric in the context of other economic indicators. Despite those limitations, the monthly jobs growth figure remains a key indicator of how the economy is faring.

Where Do You Get Jobs Growth Numbers?

The Bureau of Labor Statistics gets job growth data from a survey of 122,000 businesses and government agencies, which account for about 20% of the total U.S. nonfarm employment.

What Jobs Have the Highest Growth Rate?

According to the Bureau of Labor Statistics, the fastest-growing jobs from 2022 to 2032 include wind turbine service technicians, nurse practitioners, data scientists, statisticians, taxi drivers, information security analysts, physician assistants, actuaries, and software developers.

What Is the U.S. Job Growth Prediction?

Total U.S. employment is expected to grow by approximately 4.7 million jobs from 2022 to 2032. Total employment till then is expected to grow 0.3% annually, which is slower than the 1.2% annual growth in the previous decade from 2012 to 2022. A large part of this is due to the slowing growth in the population and a reduction in the labor force participation rate due to the aging of the baby boomer generation.

The Bottom Line

Jobs growth refers to the number of nonfarm payroll jobs added to the economy in a month. It is a leading indicator of the health of the economy. The more jobs added indicate a healthier economy.

Article Sources
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  1. U.S. Bureau of Labor Statistics. "Frequently Asked Questions about Employment and Unemployment Estimates."

  2. U.S. Bureau of Labor Statistics. "Employment Situation Summary."

  3. U.S. Bureau of Labor Statistics. "Monthly Employment Situation Report: Quick Guide to Methods and Measurement Issues."

  4. Federal Reserve Bank of St. Louis. "Nonfarm Payrolls: Why Farmers Aren’t Included in Jobs Data."

  5. Board of Governors of the Federal Reserve System. "How Does the Federal Reserve Affect Inflation and Employment?"

  6. U.S. Bureau of Labor Statistics. "Current Employment Statistics - CES (National): CES Overview."

  7. U.S. Bureau of Labor Statistics. "Fastest Growing Occupations."

  8. U.S. Bureau of Labor Statistics. "Employment Projections: 2022-2032 Summary."

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