Non-Farm Employment – Total and Change
The graph below shows the level of non-farm employment since 2001. You can see the dramatic drop in March 2020 due to the COVID-19 shutdowns, and then the 2-year recovery. Employment reached the pre-COVID peak in August 2022.
This chart shows the seasonally-adjusted monthly change in the number of private, non-farm jobs for the past 12 months.
Establishment vs. Household Survey
The non-farm employment numbers above are based on what is called the “establishment” or “payroll” survey. It “is designed to measure employment, hours, and earnings in the nonfarm sector, with industry and geographic detail.” There is another measure of employment known as the “household” survey. It is designed to measure the labor force status of the civilian noninstitutional population with demographic detail. Data from this survey is used to calculate the labor force and the unemployment rate. Obviously, because these surveys are measuring different things, they are going to be different on a month-to-month basis. However, one would expect that they move in roughly the same direction. When they move in direct opposition to one another, it raises questions about the status of the labor market. Below, the blue bars represent the establishment survey, while the red bars represent the household survey.
Full-time vs. Part-time jobs
Usually it is the total number of new jobs that are reported. But not all jobs are equal. The graph below shows the growth in the number of people reporting to have a full-time job versus the growth in the number of people with a part-time job.
Unemployment Rate
The unemployment rate is simply the ratio of the number of unemployed people to the total labor force. However, interpreting the rate can be tricky. For example, people who have dropped out of the labor force aren’t counted as unemployed. If the economy is exceptionally bad, and the unemployed become discouraged and stop looking for work, they are no longer considered part of the labor force, and thus, are no longer counted in the unemployment rate. In such a situation, the rate could actually go down as the labor situation worsens.
Further, people who are employed part-time, but would prefer full-time work are still considered to be employed. These part-time employees, in addition to the discouraged workers and other marginally attached workers, represent available labor that the traditional unemployment rate doesn’t measure. However, the U-6 measure of unemployment does include these workers and is a better overall indication of the true level of unemployment.