The Bureau of Labor Statistics (BLS) is the U.S. federal government’s principal fact-finding agency in labor economics and statistics. It operates within the U.S. Federal Statistical System, collecting, analyzing, and disseminating objective data to support public and private decision-making. The agency’s core mission involves measuring labor market activity, working conditions, price changes, and productivity across the U.S. economy. These measurements provide fundamental economic indicators used by policymakers, businesses, and the public to understand the nation’s economic health.
Tracking the State of Employment and Unemployment
A primary focus for the BLS is determining the quantity and distribution of the national labor force through two distinct monthly surveys. The Current Population Survey (CPS), or household survey, collects data from approximately 60,000 households across the country. This survey establishes the labor force status of the civilian noninstitutional population aged 16 and over, yielding the national unemployment rate (U-3) and the labor force participation rate.
The CPS provides demographic information on the employed and unemployed, including details like age, sex, and race. It measures the number of employed people, including agricultural workers and the self-employed, based on where they live. The second major measure is the Current Employment Statistics (CES) survey, also known as the payroll or establishment survey, which samples about 119,000 businesses and 629,000 worksites.
The CES provides a reliable count of nonfarm payroll jobs, hours, and earnings, offering detailed breakdowns by industry and geographic area. Unlike the household survey, the payroll survey counts the number of jobs, not the number of people, and is based on where the work takes place. Both the CES and CPS data are released monthly in the Employment Situation news release, providing a comprehensive view of the labor market.
Monitoring Worker Compensation and Earnings
Another priority involves tracking the cost of labor to understand trends in employer expenditures and worker purchasing power. The Employment Cost Index (ECI) measures changes in the hourly cost of compensation for employers. The ECI is designed to provide a “pure” cost change by factoring out the influence of workers shifting between different occupations or industries.
Compensation includes two main components: wages and salaries, and the cost of employee benefits. Benefit costs cover a range of employer payments, from legally required contributions like Social Security to voluntary benefits such as health insurance and paid time off. Distinguishing between these two components, the ECI shows how total labor costs are changing over time.
The index is a quarterly measure, providing a stable, comprehensive look at labor costs that complements the monthly average hourly and weekly earnings data. Changes in benefit costs and wages often move at different rates, providing nuanced detail about the value associated with employment. This data allows analysts to calculate real, inflation-adjusted compensation changes, which speak directly to a worker’s gain in purchasing power.
Measuring Inflation and Consumer Prices
The BLS prioritizes measuring changes in the prices of goods and services, which is necessary for calculating the rate of inflation and assessing economic stability. The most widely cited result is the Consumer Price Index (CPI), which tracks the average change in prices paid by urban consumers. The CPI is constructed around a hypothetical “market basket” of hundreds of consumer goods and services, categorized into eight major groups like food, housing, and medical care.
This market basket is developed from expenditure information provided by families and individuals on their spending habits. BLS data collectors price these items monthly from thousands of retailers, service providers, and housing units across 75 urban areas. One CPI variant, the CPI for Urban Wage Earners and Clerical Workers (CPI-W), is used to index Social Security benefit payments and certain other federal programs.
Another price gauge is the Producer Price Index (PPI), which measures the average change over time in the selling prices received by domestic producers for their output. While the CPI tracks prices from the consumer’s perspective, the PPI tracks price changes at the wholesale or factory level. This provides an early indicator of potential future consumer price movements. Together, the CPI and PPI provide a two-sided view of price dynamics within the U.S. economy.