And Just Like That, 818,000 Jobs Vanished
The BLS Does It's Annual Rite Of "Correcting" Its Numbers
By now, readers are well acquanited with my curmudgeonly take on the Department of Labor’s Bureau of Labor Statistics and its inability to publish numbers that do nothing but remind us why statisticians should not drop acid.
Suffice it to say, today the BLS once again lived down to their reputation. They made 818,000 jobs “disappear”.
No, that was not a typo. They really did do that!
Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. For National CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus one-tenth of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates an adjustment to March 2024 total nonfarm employment of -818,000 (-0.5 percent).
Of course, the BLS would have you believe this is all normal stuff. Nothing to see here, just move along, people!
In accordance with usual practice, the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued in February 2025 with the publication of the January 2025 Employment Situation news release.
However, a quick look at the BLS’ own news release shows there’s some cause for concern here.
If the average revision is ±0.1%, then this revision is five times the average! And the revision for total private employment is worse.
In marksmanship terms, that’s not just missing the bullseye, that’s missing the whole bloody target!
Corporate media has been, of course, quick to downplay the fudging revisions.
“It is important for markets to remember that these are not job losses, it is just that the job count was never that high,” wrote Chris Rupkey, chief economist at FwdBonds in a note Wednesday. “The economy apparently did not need those phantom ‘lost’ workers, because robust real consumer expenditures powered very strong [economic] growth in the second half of last year.”
In other words, don’t worry, folks! Those jobs were never really there.
Gee….where have I heard that before?
Still, we should give credit to the New York Times for reporting that this means the job market was never as sound as they claimed it was.
The updated numbers are the latest sign of vulnerability in the job market, which until recently had appeared rock solid despite months of high interest rates and economists’ warnings of an impending recession. More recent data, which wasn’t affected by the revisions, suggest job growth slowed further in the spring and summer, and the unemployment rate, though still relatively low at 4.3 percent, has been gradually rising.
Why, they even praised Federal Reserve governor Michelle Bowman for admitting highlighting the fact that the jobs numbers had been bogus all along (emphasis mine).
There are also risks that the labor market has not been as strong as the payroll data have been indicating, and it appears that the recent rise in unemployment may be exaggerating the degree of cooling in labor markets. The Q4 Quarterly Census of Employment and Wages (QCEW) report suggests that job gains have been consistently overstated in the establishment survey since March of last year, while the household survey unemployment data have become less accurate as response rates have appreciably declined since the pandemic.
Gee, where have I heard that before?
The staggering implication of the BLS revision is not that a number was egregiously overstated—although it is clear once again that the numbers are egregiously overstated.
The truly disturbing—actually terrifying—aspect of this is that we have yet more confirmation that the BLS does not know how to fix their broken reporting schemes. Every month they are presenting data that increasingly obviously flawed. They are presenting data which is simply wrong. Apparently they are aware of this, or at least are able to see it now and again during their benchmarking exercises.
What they are not able to do is fix the system. What they have not done is correct their processes to get more accurate data month to month.
Remember, this is the data the Fed uses to decide whether it wants to raise the federal funds rate or lower it. The BLS is telling us the Fed is using garbage data in their efforts to micromanage the economy.
What could possibly go wrong?
Donald Trump needs to add a plank to his campaign platform: hire some people at BLS who can actually do bloody math!
Bidenomics!
What a bunch of Bozos! “...to publish numbers that do nothing but remind us why statisticians should not drop acid.” Heeheehee.
Place your bets folks. Will Harris completely ignore this, or spin it in some pathetic way?