BLS jobs report explained in non-technical terms

Employment Situation Infographic

Source: BLS. Infographic by Patricia Bouweraerts. Click on the image to enlarge.

By Patricia Bouweraerts

At first glance, the monthly jobs report by the U.S. Department of Labor, Bureau of Labor Statistics (BLS) may appear opaque, masked as if for a costume party with technical terminology unfamiliar to most people.

Setting aside for a moment the technical wording, the BLS monthly jobs report is easy to find, download, and the reports contain a wealth of data. Terms may be looked up on the BLS online glossary. The data sets can help people deciding on a career, changing their occupation or figuring out what direction to take their career.

First of all, what the media calls “the jobs report” is actually the Employment Situation news release, and it is announced early each month. The BLS posts a schedule for releases on their website, and it is typically the first Friday of the month. The reports are also archived and date back to 1994.

This monthly report summarizes some of the most significant changes the BLS has found. The release also links to tables showing categorized employment figures. Scrolling to the bottom of the report, a PDF can be downloaded, which is more printer-friendly.

In newspaper and radio newscasts, the part of the BLS report that is most often talked about is the unemployment rate. This figure helps indicate the general health of the economy and is also of interest to the public because it may inform decisions such as investing. But there are additional facets of the report that are informative for people when making education and career decisions.

Helpful sections include comparison of average pay rates by industry, percentage of part-time and full-time employment, average hourly workweek, and breakout figures of employment increase or decrease in the different job sectors.

Industry sectors

The July 2016 Employment Situation reported that the most jobs were added in two categories of leisure and hospitality, and healthcare and social assistance. This second category includes private education and day care services jobs.

Looking a little bit deeper, and comparing pay rates in table B-8, numbers indicate these sectors don’t pay as well as other sectors even though recently they showed the most hiring. Paul Vigna comments in the Wall Street Journal blog about the 59,000 jobs added in June for the leisure and hospitality sector.

Non-supervisory Employee Infographic

Infographic by Patricia Bouweraerts. Click on the image to enlarge.

“Average weekly wages in June were $319.47, up 3.1 percent from $309.73 a year ago.” Vigna wrote. “(I personally like looking at the weekly rather than hourly average, as I think it gives you a more realistic idea of what these pay levels look like.) Average hourly earnings for this group were $12.83 last month. Multiply the weekly number by 52 weeks, and you get $16,600.”

He continues his commentary with the healthcare and education category, which added 58,000 jobs.

“The category education and health services saw average weekly earnings were $721.28, up two percent from $707.20 a year ago,” Vigna wrote. “For a full 52 weeks, that’s $37,500. … By the way, table B-8 covers wages for non-supervisory employees, which comprises about 80 percent of the workforce.”

Therefore, if a person is looking to work in one of these two industry sectors, it is a good time to apply for a job. But in a non-supervisory role, the pay will not be as high as sectors including information, professional and business services, and financial activities.

Labor force participation rate and the employment to population ratio

At first, the terms “labor force participation rate” and the “employment to population ratio” might seem to indicate the same thing. They are both measures of people, not jobs, but the people in each group are categorized differently by the Bureau.

First, terminology includes “civilian non-institutionalized population.” This category consists of people living in the U.S. who are not on active duty in the military and don’t live in long-term hospitals or nursing homes, or are incarcerated.

The labor force is everyone employed, in addition to all who are unemployed and actively looking for a job. Therefore, the “labor force participation rate” is a percent of civilians who are not institutionalized, and work or are actively looking for work.

Alternatively, the “employment to population ratio” is the proportion of the civilian non-institutionalized population age 16-years-old and over who are currently employed.

“The labor force participation rate includes the unemployed, while the employment-population ratio is limited to comparing the population to those employed,” wrote Gary Steinberg, BLS press officer in an email.

Employment to Population ratio has decreased since 1996

The Bureau reports in its Employment to Population ratio table that in May 2016, 59.7 percent of the U.S. population 16-years-old and over worked part-time or full-time in civilian, non-farm employment. Typically, the numbers for the past month or two are preliminary in the BLS job report, so if a letter “p” is seen by a number, that indicates it’s preliminary. Entering the years 1996-2016 into the servlet table on the BLS.gov shows employment to population ratios for the following:

Employment to Population Ratio Chart

Screen capture retrieved on July 15, 2016 from bls.gov.

Taking a look at the highs and lows, the highest percentage of employed Americans was in the year 2000, and the lowest in the years of the recession and post-recession period of about 2010-2013.

So, it may be concluded that the percentage of the U.S. population working in 2016 is lower than it was 20 years ago.

The average hourly workweek is posted in table B-2 of the Employment Situation

“The hourly workweek table B-2 (of the Employment Situation report) includes all non-farm payroll jobs, including both full-time and part-time,” Steinberg wrote. “By industry category, the private sector measure excludes government workers.”

The average hourly workweek is measured by averaging the working hours of those employed part time and full time. This figure doesn’t include those in federal, state, county, and city government jobs such as teachers, postal carriers or those holding public office.

There has been a decline in average weekly hours worked through America’s history. In 1940, the average hours worked per week in America was 43.3, according to the Economic History Association on eh.net.

The eh.net article states that in 1960, average weekly work hours in America had declined to 40.9, and in 1980 further decreased to 39.8. Between 1964 and 1999, a couple of new and important trends contributed to a more rapid decline in the average hourly workweek measured in the BLS Current Employment Statistics (CES) measure.

Katie Kirkland, an economist in the Office of Employment and Unemployment Statistics, BLS, wrote an article called “On the decline in average weekly hours worked,” posed on bls.gov. In the article, she described the nationwide trends during this time period.

The mining, construction and manufacturing sectors, which typically had the highest average weekly hours, decreased their non-supervisory production workers, she wrote. In contrast, the retail trades and services sectors — which typically had the lowest average weekly hours — dramatically increased their non-supervisory personnel. More service workers were needed because Blue Laws were repealed in most states and stores could remain open on Sundays. Shopping malls sprung up rapidly during this time, and their hours remaining open increased. With the growth of dual-income families, the demand grew for restaurant service workers. Also, the help supply services industry, or temporary help agencies, grew and added employees.

In the BLS CES measurement, “a person working two part-time jobs of 20 hours a week is counted as having two 20-hour jobs,” Kirkland wrote.

Therefore, two 20-hour jobs are not counted in the measure as one 40-hour week.

When an industry adds workers, it is weighted higher in the CES Average Weekly Hours. Therefore, because the service industry experienced a 329 percent growth in non-supervisory workers, and employees in this sector work the least number of hours per week, it brought down the total average weekly hours for the entire private, non-farm measurement, she wrote.

More recently, in the past 10 years, the average hourly workweek in the U.S. is about 34-and-a-half hours for private, non-farm workers. The number has remained fairly consistent and steady.

When looking at numbers reported in May of each year since 2006, workweek hours are listed on BLS.gov as ranging between 34.1-34.5 per week. The only exception is 33.8 in May 2009, during the most recent recession.

The share of 16- to 24-year-olds saying they didn’t want a job rose from an average 29.5 percent in 2000 to an average 39.4 percent over the first 10 months of this year (2014).

Drew DeSilver, Pew Research Center

Unemployment Rate

The BLS jobs report breaks down the unemployment rate into a few extra sub-categories to delineate what is happening, or factors that contribute to the overall number. In addition to the above-mentioned labor participation rate and employment to population rate, the sub-categories include the following:

  • Unemployment by gender, age and race
  • Length of unemployment
  • Job losers and those completing temporary jobs
  • Involuntary part-time workers
  • Marginally attached workers: those who stopped looking for work four weeks prior to the survey
  • Discouraged workers who have given up looking for work

“The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) decreased by 587,000 to 5.8 million in June (2016), offsetting an increase in May,” according to the Employment Situation — July 2016 release. “These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)”

Marginally attached means that workers either have temporarily stopped looking for work, or have stopped looking because they needed to interrupt a job search to take an educational course, were ill or cared for a family member.

“In June, 1.8 million persons were marginally attached to the labor force, about unchanged from a year earlier,” the report adds. “(The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey. (See table A-16.)”

A subgroup of the marginally attached are called “discouraged workers.”

“Among the marginally attached, there were 502,000 discouraged workers in June, down by 151,000 from a year earlier,” according to the July 2016 report. “(The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.”

Drew DeSilver of the Pew Research Center analyzed the number of discouraged workers following the Great Recession in his article, “More and more Americans are outside the labor force entirely. Who are they?

“The number of discouraged workers — those who’ve not searched for work recently because they don’t think they’ll find any — spiked during and after the Great Recession, peaking at 1.3 million in December 2010,” DeSilver wrote. “Though that number has come down since, October’s (2014) estimate of 770,000 discouraged workers was still well above pre-recession levels, which typically hovered around 400,000 to 500,000.”

Since the July 2016 Employment Situation reported 502,000 discouraged workers in June, this might indicate there are more open jobs advertised and therefore more positions for which to apply. Alternatively, because the number is near the top end of the range measured before the Great Recession, there are still many who have given up on finding work.

Take-aways

Therefore, based on the data posted by the BLS, one can conclude the average workweek in America is holding steady after a long decline, average hourly earnings are rising — with certain sectors still lower in wage-earning power, and the unemployment rate is declining.

Perhaps the most surprising and unexplained finding is that the number of people saying they don’t want a job is rising in people who are between 16 and 54 years old, especially in the group under the age of 24. In the age group including those between 25 and 54 — typically the main working years — the number saying they don’t want a job is also increasing, but not as sharply.

Chart of Increase in Those 25-54 Who Don't Want a Job

Screen capture retrieved on July 13, 2016 from bls.gov.

“The share of 16- to 24-year-olds saying they didn’t want a job rose from an average 29.5 percent in 2000 to an average 39.4 percent over the first 10 months of this year (2014),” DeSilver wrote. “There was a much smaller increase among prime working-age adults (ages 25 to 54) over that period. And among people aged 55 and up, the share saying they didn’t want a job actually fell, to an average 58.2 percent this year.”

Perhaps the next few job reports will start to unmask what effects these trends will have on the U.S. economy and regular working people.

Further resources about employment statistics

  • State employment projections are also posted online, such as the Nevada Department of Employment, Training and Rehabilitation (DETR). Its Nevada Labor Market Information is a section of DETR’s website where you can select the Career Resources – NCIS menu tab, and then click on NCIS on the next page. Hover over the Occupations menu tab, where an occupation filter will present the wages and employment outlook for many possible careers.
  • More state area employment projections: www.projectionscentral.com.

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