Understanding the Jobs Report and Unemployment Rate: A Complete Guide - Crypto.com US

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What is the jobs report?

The ‘jobs report’ is the colloquial name for the Employment Situation Summary, a comprehensive monthly release published by the Bureau of Labor Statistics (BLS) that provides insights into the health of the American labor market. 

The report is compiled from two distinct surveys that together paint a complete picture of employment conditions:

1. The establishment survey – Also known as the Current Employment Statistics survey (CES), which polls approximately 145,000 businesses and government agencies covering circa 697,000 individual worksites. This survey provides data on nonfarm payroll data, including the number of jobs added or lost, average hourly earnings and average weekly hours worked. 

2. The household survey – Also known as the Current Population Survey (CPS), interviews about 60,000 households to determine their employment status, producing the official unemployment rate and labor force participation rate.

Key metrics included in the monthly employment situation report include nonfarm payrolls (the total number of paid workers excluding farm workers, private household employees and non-profit organization employees), the unemployment rate, labor force participation, average hourly earnings and the average workweek. 

The report is typically released on the first Friday of each month at 8:30 AM Eastern Time, covering employment data from the previous month. This makes it closer to real-time data than any other report, and so is fairly considered to be one of the most important economic indicators

For context, employment directly affects consumer spending, which in turn drives approximately 70% of the US economy. In general, strong employment typically signals economic expansion, while weakening employment can predict economic contraction.

Understanding the unemployment rate

The unemployment rate is officially defined as the percentage of the US labor force that is jobless and actively seeking employment. This seemingly simple metric is actually the result of careful statistical methodology applied to household survey data collected monthly from tens of thousands of American households.

The calculation divides the number of unemployed individuals by the total labor force and multiplies by 100 to get a percentage. However, the devil is in the details of who counts as ‘unemployed’.

To be classified as unemployed, an individual must be without a job, available for work and have actively looked for employment within the past four weeks. This definition excludes several categories of people without jobs, including: 

• Discouraged workers who have stopped looking because they believe no jobs are available .
• People who want to work but haven't searched recently.
• Those working part-time who want full-time work.
• Individuals who aren't working and also aren't looking (such as students, retirees, or stay-at-home parents).

As of August 2025, the unemployment rate stands at around 4.3%, a 0.1 percentage point increase from a year before. This reflects the relatively stable labor market following the pandemic recovery and is considered by most economists to be relatively healthy, though assessments vary.

For perspective, economists generally view an unemployment rate between 3.5% and 5% as healthy, representing what's often called ‘full employment’ or the ‘natural rate of unemployment.’ 

This doesn't mean zero unemployment. Some level of unemployment is normal and even healthy in a dynamic economy where people transition between jobs, recent graduates enter the workforce and industries evolve. Below 3.5%, labor markets can become overheated, potentially driving wage inflation. Above 5%, concerns about inadequate job creation and economic weakness start to flare up.

However, the unemployment rate has significant limitations as a single metric for understanding labor market health. It doesn't capture underemployment, it doesn't account for the quality of jobs being created, it misses workers who have left the labor force entirely and it doesn’t reflect wage growth or purchasing power. 

This is why you need to consider the full suite of labor market indicators rather than relying solely on the headline unemployment statistics.

Current jobs report: Key statistics and trends

The most recent US jobs data from August 2025 indicates a labor market that has cooled from the rapid post-pandemic expansion but remains resilient overall. 

Total non-farm payroll employment increased by 22,000 in August 2025, following moderate gains earlier in the year. This figure is a significant deceleration from the 150,000–250,000 monthly range seen through much of 2023 and early 2024. Over the past year, benchmark revisions have also reduced earlier job growth estimates, suggesting that hiring momentum has been weaker than initially reported.

Despite this slowdown, the labor market remains broadly stable. The unemployment rate stands at 4.3% in August, and only up slightly from the historic lows of 3.4–3.5% reached in 2022–2023. Labor force participation was 62.3%, while the employment-population ratio held at 59.6%, with both figures indicating a labor market that has largely normalized.

However, it’s worth noting the nuances; healthcare and social assistance grew by 31,000 jobs while manufacturing fell by 12,000 and is down by 78,000 over the past year.

Average hourly earnings rose by 0.3% month-on-month and 3.7% year-on-year to $36.53. This marks a continued moderation from the 5% to 6% annual wage growth seen during 2022 and 2023. The slower pace is viewed positively by the Federal Reserve, as it helps ease inflationary pressures while still supporting modest real-wage gains for workers.

The data reinforces expectations that the Federal Reserve may consider further rate cuts over the next few months, as evidence mounts that labor market tightness and wage driven inflation have eased significantly.

However, revisions to previous months' data remain an important element of each release. The BLS routinely revises the prior two months' figures as more complete data becomes available, and these revisions can sometimes significantly alter the narrative. 

Perhaps more importantly, the US government shutdown means we lack the most up-to-date numbers which could make for some volatile trading sessions when this data next becomes available.

Beyond the headline numbers: Additional labor market indicators

Other useful indicators include:

U-6 unemployment rate 

The U-6 unemployment rate provides a broader measure of labor underutilization that includes not just the ‘officially unemployed’ but also marginally attached workers and those employed part time for economic reasons. 

As of August 2025, the U-6 rate was 8.1%, significantly higher than the headline rate, implying that millions of Americans face employment challenges not captured by the standard unemployment statistics.

Labor force participation rate 

The labor force participation rate measures the percentage of the working-age population (16 and older) that is either employed or actively seeking employment. 

The participation rate currently stands at approximately 62.3%, still below the pre-pandemic level of 63.3% and well below the all-time high of 67.3% reached in 2000. Lower participation can indicate discouraged workers, demographic shifts (such as retiring Baby Boomers) or structural barriers to employment.

Employment to population ratio (EPOP) 

The employment to population ratio (EPOP) provides another perspective by measuring the percentage of the working-age population that is employed, regardless of whether non-employed individuals are actively seeking work. This ratio currently stands at approximately 60%, offering insight into how effectively the economy is utilizing its potential workforce.

Average hourly earnings data 

Average hourly earnings data reveals wage growth trends crucial for understanding both worker welfare and inflationary pressures. Recent figures show year-over-year wage growth of around 4%, exceeding current inflation rates and providing real wage gains for workers.

Job Openings and Labor Turnover Survey (JOLTS report)

The Job Openings and Labor Turnover Survey (JOLTS report), which is released monthly about six weeks after the jobs report, provides complementary indicators including job openings, hires, quits and layoffs. Recent JOLTS data shows job openings at approximately 7.3 million, down from the peak of over 12 million in 2022 but still elevated historically.

How economists and markets interpret the jobs report

Economists assess whether a jobs report is strong or weak by considering multiple dimensions simultaneously. 

Job creation is evaluated against expectations and what's needed to keep pace with population growth (typically 100,000-150,000 jobs monthly). The unemployment rate trend and level are assessed relative to historical norms and economic cycle position. 

Wage growth is examined for inflationary implications and worker purchasing power, while sector breakdowns reveal whether growth is broad-based or concentrated. Revisions to prior months will indicate whether recent trends are strengthening or weakening, as labor force participation changes show whether job growth is drawing people into employment or merely keeping pace with those entering.

The Federal Reserve pays close attention to employment data due to its dual mandate of maximum employment and price stability. Strong employment coupled with accelerating wages may prompt interest rate increases to prevent overheating and inflation, while conversely, weakening employment might lead to rate cuts to stimulate economic activity. 

The Fed explicitly references jobs report data in its policy statements and uses employment trends to calibrate the pace and magnitude of monetary policy adjustments.

Financial markets typically react significantly to jobs report surprises. Better-than-expected employment growth often boosts stock markets (signaling economic strength) but can pressure bond markets (raising inflation concerns). Weaker-than-expected reports might depress stocks (economic weakness fears) but rally bonds (speculation about Fed rate cuts). 

However, reactions have become more nuanced in recent years, with perceived good news sometimes being bad news if strong employment might prevent Fed rate cuts, and vice versa. Often what may feel like a surprise is already priced in.

Different sectors react differently to specific employment data:

• Financial sector stocks – Often respond to implications for Fed policy and interest rates. 
• Consumer discretionary stocks – React to wage growth data and consumer spending potential. 
• Industrial and manufacturing stocks – Respond to sector specific employment trends. 
• Bond yields – Typically rise on strong reports (inflation concerns) and fall on weak reports (growth concerns and potential Fed easing).

Economists across the spectrum interpret data through different lenses. Some emphasize job creation numbers as primary indicators of economic momentum, while others focus more on wage growth and whether it's keeping pace with inflation. 

Some prioritize broader measures like U-6 and labor force participation over the headline rate. Progressive economists may emphasize job quality and wage equity, and more traditional economists focus on total employment levels and unemployment rates. It can make sense to follow multiple analysts to consider a range of views.

Demographic and sector analysis of employment data

Employment data can also be broken down by demography and sector:

• Unemployment rates by age – Younger workers (16–24) typically face unemployment rates roughly double the overall rate, reflecting their limited experience and higher job turnover. Prime working-age adults (25–54) enjoy the lowest unemployment rates of typically 3.0–3.5%. Older workers (55+) have historically had low unemployment rates but face longer stints of unemployment when job loss occurs.

• Unemployment rates by race and ethnicity – Asian unemployment rates are typically lowest at around 3.0–3.5%. White unemployment rates hover near 3.5–4.0%, while Hispanic unemployment rates run around 4.5–5.0%. Black unemployment rates remain elevated at approximately 5.5–6.5%, roughly twice the white rate.

• Educational attainment – Workers with bachelor’s degrees or higher face unemployment rates around 2.0–2.5%, while those with some college or associate degrees experience rates around 3.5–4.0%. High school graduates without college see rates of 4.5–5.5% and those without high school diplomas face unemployment rates of 6.0–7.5%.

• Sectoral trends – Strongest job growth is currently seen in healthcare and social assistance (driven by demographic aging), professional and technical services (particularly in technology), and accommodation and food services (continuing recovery from pandemic impacts). Sectors experiencing contraction or stagnation include retail (e-commerce competition), manufacturing (affected by automation and trade factors), and information services.

• Structural changes – The service economy continues to expand, while remote and hybrid work arrangements are becoming permanent for many positions. Healthcare employment is growing as a share of total jobs, automation is affecting both manual and cognitive tasks, and qualification requirements are increasing across many occupations.

• Regional variations – States in the Sun Belt and Mountain West generally show stronger employment growth. Midwestern industrial states face mixed conditions, with some metropolitan areas thriving while rural areas struggle. Coastal technology hubs experienced rapid pandemic-era growth followed by recent moderation. 

• Part time versus full time employment – Involuntary part time employment (those working part time who want full time work) has been indicating some labor market slack. The proportion of part time workers has increased over decades, raising questions about job quality and healthcare access.

• Gig economy and self-employment – Traditional surveys may not fully capture app-based gig work, independent contractors and multiple job holders. Self-employment represents approximately 10% of total employment, with trends varying by economic conditions.

Limitations and criticisms of jobs report and unemployment metrics

Like all datasets, employment metrics face some issues:

• Methodological limitations – Sampling error is inherent in survey data. The household survey of 60,000 households carries a margin of error, meaning the true unemployment rate could be higher or lower than reported. The establishment survey, while larger, still samples rather than censuses all employers. 

• Discouraged workers – Individuals who want to work but have stopped looking because they believe no jobs are available aren't counted as unemployed, so they're simply not in the labor force. During prolonged economic difficulties, substantial numbers of discouraged workers can make the unemployment rate appear better than actual labor market conditions. 

• Seasonal adjustment factors – These attempt to account for predictable employment patterns (holiday hiring, summer youth employment, etc) but are based on historical patterns that may not perfectly reflect current dynamics. Changes in seasonal patterns can make seasonally adjusted data less reliable in the short term.

• Preliminary estimates and revisions – Initial employment reports are preliminary estimates subject to revision as more complete data becomes available. The BLS revises the prior two months' figures with each release, and these revisions can be substantial.

• Annual benchmark revisions – These compare survey data to unemployment insurance records, occasionally revealing even larger discrepancies. This means the news from initial reports can be significantly wrong.

• Alternative employment metrics – Preferred by some economists, these include the prime-age employment-to-population ratio (focused on 25–54-year-olds to minimize demographic distortions), the U-6 broader unemployment measure, median wage growth rather than average (less influenced by high earners), and measures of job quality including benefits, stability and advancement opportunities.

• Common misconceptions – These include the belief that only those receiving unemployment benefits are counted (the figures are based on household survey responses regardless of benefit receipt), that the government manipulates the data for political purposes and that discouraged workers are counted as unemployed (they aren’t).

Using employment data for economic forecasting

Employment data serves paradoxically as both lagging and leading economic indicators. As a lagging indicator, employment typically continues growing in early recession stages and keeps falling in early recovery stages as businesses are slow to lay off and rehire workers. 

As a leading indicator, certain employment metrics can signal future economic conditions. For instance, declining employment often precedes broader weakness, while increasing job openings suggest future hiring.

The correlation with other economic metrics strengthens employment data's forecasting value. Strong employment growth typically translates to higher consumer spending (which drives approximately 70% of US GDP), rising confidence measures, increased housing demand and greater tax revenues. Conversely, weakening employment usually precedes reduced consumer spending, declining confidence, softening housing markets and reduced tax revenues.

Identifying potential turning points in economic cycles involves watching for divergences and extremes. When job growth consistently falls short of expectations, when layoff announcements increase across most sectors, when temporary employment declines, when the unemployment rate begins rising even slightly and when wage growth decelerates rapidly, recession risk increases. 

Conversely, sustained strong job growth, declining unemployment, accelerating wages and rising labor force participation suggest continued expansion.

Interpreting data during unusual periods requires special consideration. During recessions, employment typically continues falling for months after GDP begins recovering, while the unemployment rate may lag even longer. During recoveries, distinguishing between temporary catch-up growth and sustainable expansion can be challenging. And during structural transitions (like the pandemic recovery), historical patterns may not apply.

Many analysts suggest the current labor market is cooling but not collapsing. Job growth continues at a moderate pace, sufficient to keep unemployment relatively stable, while wage growth has decelerated from pandemic-era peaks but remains above inflation, supporting real income gains. 

Labor force participation has stabilized, suggesting the pool of available workers has largely 

normalized. But while most economists expect continued gradual cooling rather than a sharp deterioration, risks exist in both directions.

Glossary of key terms

Seasonally adjusted – Statistical technique that removes predictable fluctuations related to seasons, holidays and calendar effects, allowing clearer identification of underlying trends. For example, seasonally adjusted data accounts for the predictable increase in retail employment during the holiday shopping season.

Labor force – The sum of all employed persons and unemployed persons actively seeking work. It excludes individuals who are not working and not seeking work, such as students, retirees, stay-at-home parents, discouraged workers and those unable to work due to disability.

Discouraged workers – Individuals who want employment and are available to work but have stopped actively looking for jobs because they believe no suitable work is available or that they wouldn't be hired. These individuals are not counted as unemployed because they're not actively seeking work, which is a key criticism of the headline unemployment rate.

Nonfarm payrolls – The total number of paid employees in the United States excluding farm workers, private household employees, proprietors, unpaid family members and employees of non-profit organizations. This is considered one of the most important economic indicators.

Labor force participation rate – The percentage of the civilian noninstitutional population aged 16 and over that is either employed or actively seeking employment. This measure provides insight into what proportion of the potential workforce is actually working or trying to work.

Underemployment – Includes both individuals employed part time who want full time work and those employed in positions below their skill or education level. The U-6 unemployment measure captures those working part-time for economic reasons as one component of broader labor underutilization.

Household survey – Also called the Current Population Survey (CPS), this monthly survey of approximately 60,000 households provides data on employment status, producing the official unemployment rate, labor force participation rate and demographic breakdowns of employment statistics.

Marginally attached workers – Individuals not in the labor force who want work, and are available for work, and have looked for a job sometime in the past 12 months but not in the past four weeks. This broader category includes discouraged workers plus others who stopped looking for reasons such as school attendance.

FAQs about job reports

What time is the jobs report released?

The jobs report is usually released at 8:30 AM Eastern Time on the first Friday of every month, covering employment data from the previous month. 

Why does the unemployment rate sometimes go up when jobs are added?

This occurs because the unemployment rate and job creation come from different surveys with different definitions. The unemployment rate can rise when people who weren't in the labor force (not working and not looking) begin actively seeking work—they're now counted as unemployed even though total employment also increased. 

What's a good number for monthly job creation?

Economists generally view 150,000-200,000 jobs per month as healthy and sustainable in the current economic environment. This range keeps pace with population growth and gradually reduces unemployment without overheating the labor market. 

Why are jobs reports revised after their initial release?

Initial reports are based on incomplete survey responses. As additional survey responses arrive and more complete data becomes available, the BLS revises figures for the prior two months. Annual benchmark revisions compare survey estimates to actual unemployment insurance records, sometimes revealing even larger adjustments.

How does the unemployment rate affect interest rates?

The Federal Reserve monitors unemployment closely as part of its dual mandate of maximum employment and price stability. Low unemployment with accelerating wages may prompt the Fed to raise interest rates to prevent inflation. Rising unemployment may lead to rate cuts to stimulate economic activity. 

What's the difference between seasonally adjusted and not seasonally adjusted data?

Seasonally adjusted data removes predictable patterns related to seasons, holidays and calendar effects, allowing clearer views of underlying trends. Not seasonally adjusted data shows raw changes including seasonal patterns. For example, retail employment always increases in November-December for holiday shopping, and seasonally adjusted figures account for this expected increase.

Does the unemployment rate count people who have given up looking for work?

No, this is one of the main criticisms of the headline unemployment rate. To be counted as unemployed, you must be actively seeking work. 

How accurate is the jobs report?

The jobs report is based on large-scale scientific surveys but with known margins of error and several criticisms over their accuracy. 

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