ECON 101
Understanding Labor Market Data Why the U.S. maintaining accurate jobs reports is vital for the global economy
By Robert Eyler R ecessions are rare economic events—economies strive to grow naturally. Economies achieve this through innovation, investment and partnership with the government which serves as a regulator and additional investor in support infrastructure, revenue-generating contracts and legal frameworks such as patent protection. Private-sector investment, as a key ingredient in economic growth, generally bets on macroeconomic success as the context for industry or business growth. For equity markets, where investors make such bets of all sizes, accurate measures of macroeconomic conditions are crucial to how financial markets function in terms of available information and the meaning of that information to firm profitability. Recessions are generally declared due to eroding labor market conditions and expectations in trend. For most laypeople, the unemployment rate is a key statistic to watch due to its
ease of understanding and dynamics. When unemployment rises sharply, a recession may be nearer, while a decline reduces negative pressure. Unemployment, however, is generally considered a “coincident” indicator. When unemployment changes, the tide has already shifted in one way or another on macroeconomic conditions. The monthly “jobs report” that comes from the federal
Bureau of Labor Statistics (BLS) starts with changes in “non- farm” employment levels. That signal comes in many forms after
Original and Revised Estimates, Non-Farm Workers (Thousands of Workers), July 2024 to June 2025, United States. Source: Bureau of Labor Statistics (BLS), https://www.bls.gov/web/empsit/cesnaicsrev.htm
18 NorthBaybiz
October 2025
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