When examining a jobs report, there are a few key numbers and facts to look at.
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The first is the headlining number. For example, you may look at the unemployment rate, how many jobs were created and how many were lost.
Secondly, you’ll want to notice any specific trends. Are the rates or numbers stronger or weaker? You’ll be able to notice trends by looking at more than just one month’s data. Compare the data over a few months or years.
Then, ask yourself what’s going on behind the numbers. The unemployment rate, for example, is just a fraction. It all depends on how many people at that time have jobs, are looking for jobs and how many are in the workforce.
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As you’re studying the data, note seasonal changes or trends. For example, every January, the country suffers a ton of job loss due to post-holiday retail layoffs.
The next thing to do is to identify any job growth or sectors that are growing and shrinking. Do the sectors include white collar jobs or blue collar jobs?
And lastly, if you want to feel like an expert, really take a look at what the government says in its press releases regarding the numbers. Government officials will often mention revisions to previous news releases and these are a big clue to how the economy is really doing.
For example, if the government corrects a previous release and says the unemployment rate was actually lower, that could signify the economy is doing well.
And of course, the opposite can happen. And then, you know something bad could be going on with the economy.
