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Employment Situation

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Sterling Martin
Principles of Investments

The Employment Situation The Employment Situation is the most widely anticipated piece of economic information monitored by financial markets. Released during the first week of the month, the BLS provides investors with an in depth analysis on the previous month’s labor market by analyzing various economic indicators. This report is prepared using statistics from two major surveys, the Current Population Survey (CPS; Household Survey) and the Current Employment Statistics Survey (CES; Establishment Survey)
The household survey does a very good job of providing useful information on the labor force, employment, and unemployment rates. Using a sample that best reflects the entire civilian non-institutional population, the household survey is based on the responses to a series of questions on work and job search activities. In doing so, the BLS is able to classify individuals as either employed, unemployed, or not in the labor force. Establishment surveys consists of surveys of business that are critical to our comprehension of economic trends. By using data found in the payroll records of nonagricultural business establishments, the BLS provides investors detailed industry data on employment, hours, and earnings of workers on non-farm payrolls through its use of the Establishment Survey. Due to its timeliness, accuracy, and importance as an indicator of economic performance, most financial professionals would likely agree that the release of the Jobs Report is the single most important release of economic data during the year. One variable considered to be a strength of the report is the fact that there is very little lag time between the collection of information and release of the report. Another strength associated with the jobs report is the inclusion of a wide range of industries and regions to report on.

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