What Is the Bureau of Labor Statistics ?:
One section of the Employment Report, the manufacturing jobs is one of the most important leading economic indicators. Why? When demand starts to soften in a recession, manufacturers are most likely to feel it first. To meet their profit margins, which are often razor-thin, they start reducing shifts. A reduction in manufacturing jobs is often the first sign of an impending recession.
The general Jobs Report is not as much a leading indicator as the manufacturing jobs report. That's because most employers resist layoffs as long as possible. They will cut advertising and other expenses before going through the pain of layoffs. Manufacturers, on the other hand, must cut shifts if they don't have the work.
The BLS provides a variety of analyses and reports from the data collected for the Employment Report. Here's a summary:
- State, county and local employment.
- Worker characteristics.
- Employment 10-year projections.
- Monthly data on job openings, hires, and separations.
- Annual data on employment and wages by occupation and industry.
- Longitudinal studies tracking the lives and labor market experiences of six groups of men and women.
- Quarterly reports on job gains and job losses statistics.
- International employment comparisons for 10 countries.
- Various analyses of specific topics.
The BLS provides data on the age, sex, race, and other characteristics of the unemployed. It also breaks down the unemployed by length of time they've been without a job. Those who have been unemployed for so long they've become discouraged and dropped out of the labor force are no longer counted as unemployed by the BLS. Many experts say the real unemployment rate should include them. The length of time also tells you whether people are unemployed due to a mis-match between their skills and employer needs -- a situation known as structural unemployment.
In addition to national data, the BLS Unemployment Report also breaks down unemployment by state and local regions, as well as comparing the U.S. to ten other countries. The BLS also reports the monthly Mass Layoff Statistics. This summarizes major business layoffs, using data from each state's unemployment insurance database.
Inflation is important to measure, since it can affect consumer behavior. If shoppers know that prices will continue to edge up, they will be more likely to buy now when prices are relatively cheaper. This stimulates demand, which spurs economic growth. However, too much inflation rob families of their ability to buy greater quantities. This can hurt demand, as factories don't need to produce as much. If inflation gets out of control, it can turn into hyperinflation, which is when prices rise more than 10%. If prices fall too rapidly, this can cause deflation, which can be a greater threat than inflation. Why? If consumers know prices will fall in the future, they will delay their purchases. This will stifle demand, leading to lower factory production and unemployment. Companies will continue to lower prices, hoping to get what business there is. To find out how the Federal Reserve fights inflation, hyperinflation and deflation, see How the Fed Manages Inflation.
The BLS also produces these other reports from the CPI data:
- The Producer Price Index, which highlight costs to manufacturers.
- The Productivity Report, which reports on how the productivity levels of workers.
- Import and Export Prices, which reports on the prices of imports and exports.
- Employment Cost Trends, which reports on employee compensation.
- International Consumer Price Indexes, which measures inflation in some foreign countries.