There were 258,000 negative revisions in May and June.
Initial Thoughts
In May, the BLS reported 144,000 jobs. And in June the BLS reported 147,000 jobs.
I kept asking “Does anyone believe these reports?”
Today, the BLS says oops. Employment in May and June was a combined 258,000 lower than previously reported.
Job Report Details
- Nonfarm Payroll: +73,000 to 159,539,000 – Establishment Survey
- Civilian Non-institutional Population: +200,000 to 273,785,000
- Civilian Labor Force: -38,000 to 170,342,000 – Household Survey
- Participation Rate: -0.1 to 62.2% – Household Survey
- Employment:-260,000 to 163,106,000 – Household Survey
- Unemployment: +221,000 to 7,236,000 – Household Survey
- Baseline Unemployment Rate: +0.1 to 4.2% – Household Survey
- Not in Labor Force: +239,000 to 103,443,000 – Household Survey
- U-6 unemployment: +0.2 to 7.9% – Household Survey
Nonfarm Payrolls Change by Sector
Monthly Change in Nonfarm Payrolls
Monthly Revisions
- The change in total nonfarm payroll employment for May was revised down by 125,000, from +144,000 to +19,000
- The change for June was revised down by 133,000, from +147,000 to +14,000.
- With these revisions, employment in May and June combined is 258,000 lower than previously reported.
Part-Time Jobs
- Involuntary Part-Time Work: +219,000 to 4,684,000
- Voluntary Part-Time Work:+214,000 to 22,770,000
- Total Full-Time Work: -440,000 to 134,837,000
- Total Part-Time Work: +247,000 to 28,437,000
- Multiple Job Holders: -523,000 to 8,342,000
The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported.
Note that multiple job holders add to nonfarm payrolls but not the number of employed.
Hours and Wages
This data is frequently revised.
- Average weekly hours of all private employees rose by 0.1 hour to 34.3 hours.
- Average weekly hours of all private service-providing employees rose by 0.1 hours to 33.2 hours.
- Average weekly hours of manufacturers was steady at 40.1 hours.
An overall decline or rise of a tenth of an hour does not sound line much, but with employment over 160 million, it’s more significant than it appears at first glance.
However, in a falling employment setup, hours of the remaining employees tend to rise, at least initially.
Hourly Earnings
This data is also frequently revised. Here are the numbers as reported this month.
Average Hourly Earnings of All Nonfarm Workers rose $0.12 to $36.44. A year ago the average wage was $35.07. That’s a gain of 3.9%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.12 to $31.34. A year ago the average wage was $30.17. That’s a gain of 3.9%.
Unemployment Rate
The Unemployment Rate has been between 4.0 percent and 4.2 percent for 15 straight months.
Do we credit Biden, Trump, the Fed, or the BLS?
Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
- The official unemployment rate is 4.2 percent.
- U-6 is much higher at 7.9 percent.
Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. Some dropped out over Covid fears and never returned. Still others took advantage of a strong stock market and retired early.
The rest is disability fraud, forced retirement (need for Social Security income), and discouraged workers.
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report.
The birth-death model pertains to the birth and death of corporations not individuals except by implication.
For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.
Birth-Death Methodology Explained
I gave a detailed explanation of the model and why the hype is wrong in my June 8, 2024 post How Much Did the BLS Birth-Death Adjustment Pad the May Jobs Report?
I repeat, do not subtract the birth-death number from the headline number. That’s flawed.
Household Survey vs. Payroll Survey
- The payroll survey (sometimes called the establishment survey) is the headline jobs number. It is based on employer reporting.
- The household survey is a phone survey conducted by the BLS. It measures employment, unemployment and other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
The BLS payroll reports smack of oversampling large employers and undersampling small employers where jobs have been trending lower.
QCEW Report Shows Overstatement of Jobs
On June 16, I commented QCEW Report Shows Overstatement of Jobs by the BLS is Increasing
The discrepancy between QCEW and the BLS jobs report is rising.
Small Business Employment
Small businesses are the primary driver of jobs. According to ADP data small business employment has stalled.
And for employer sizes of 20-49 employees, growth is negative.
For discussion, please see post yesterday Another Weak ADP Payroll Report, Especially Small Businesses
ADP reported a gain of 104,000 private payrolls. Small businesses weak again.
At the press conference yesterday [Wednesday July 30], Powell kept referring to BLS jobs stats as if the labor marker was OK.
It was my one big disagreement with his press conference comments.
Final Thoughts
Last month I said “The BLS monthly data is total garbage. I do the best I can with BLS data.”
This month, I note the stench is so powerful that no one can pretend there is not a massive data collection sampling problem at the BLS.
I will do a detailed follow-up post on BLS issues soon.
