Financial encyclopedia

Non-farm payrolls released once a month not only reflect the simple data of American job market, but also hide a lot of important information, which is of great value to investors. The following is a detailed guide to the interpretation of non-agriculture.

The change of total employment is the most direct indicator of the health of the labor market;

Higher than expected: indicating strong economic growth, the stock market rose and the dollar strengthened.

Lower-than-expected: It implies that the economy is slowing down, the stock market is falling and the dollar is weakening.

Unemployment rate: Both unemployment rate (U3) and unemployment rate (U6) including underemployed people should be paid attention to:

Falling unemployment rate: generally a good sign, but if it is caused by falling labor force participation rate, it needs to be cautious.

Rising unemployment rate: it may indicate economic problems, but if it is accompanied by rising labor force participation rate, it may be the result of more people returning to the labor market.

The labor force participation rate reflects the proportion of working-age population participating in the labor market;

Increased participation rate: indicating economic improvement.

Declining participation rate: It may indicate labor market problems or an aging population.

Wage growth: the wage growth rate affects inflation and consumption;

Accelerated wage growth: It may indicate inflationary pressure and the Federal Reserve may raise interest rates.

Wage growth slows down: inflationary pressure eases, and the Fed may maintain or lower interest rates.

Industry distribution: the distribution of employment growth in different industries;

The growth of manufacturing and construction shows that the economic foundation is strong.

The growth of service industry: such as retail and hotel industry, may reflect the increase in consumption, but there are seasonal fluctuations.

Full-time and part-time jobs: the growth of full-time and part-time jobs;

The increase of full-time jobs: a sign of economic health.

The increase of part-time jobs may indicate that enterprises are unwilling to provide full-time jobs or workers cannot find full-time jobs.

Average weekly working hours: reflecting the intensity of enterprise activities;

Increased working hours: indicates that enterprise activities will strengthen future employment growth.

Reduced working hours: It may imply a slowdown in economic activity and possible layoffs in the future.

Revised data: Non-agricultural data are frequently revised, so we should pay attention to these changes:

Upward correction: the previous economic performance was underestimated and the market may react positively.

Downward revision: the previous economic performance was overestimated and the market may react negatively.

Comprehensive analysis of these indicators: help to accurately assess the health of the American economy, predict the future economic trend, and make more informed investment and policy decisions.