Quick question: if you work at the Bureau of Labor Statistics, does that mean you have to get the statistics…right? 🤔🧮 Asking for a friend.
This past week, news broke that the U.S. economy added wayyyy fewer jobs in 2023 and early 2024 than previously reported. 😱 Some say this little mishap is a sign that the labor market and economy are rockier than Balboa. 🥊
Here’s Five Fast Facts about job data and the economy:
- 🤪 Crappy Calculations - Talk about an oopsie. Recently the Labor Department reported they overstated job growth by an estimated 818,000 in the 12 months that ended in March 2024. What that means is that US employers really added about 174,000 jobs per month during that period, not the originally reported 242,000 jobs (a 28% difference).
- 📉 Edgy Editing - Revisions to job data aren’t unheard of, but this recent one was a doozy. Over the last 10 years, revisions were either up or down an average of 173,000 jobs. That being said, whopper revisions have happened in the past. Back in 2019, there was a 20% revision.
- 🔮 Crystal Ball - Experts who kept the pulse on things predicted this kind of revision was coming. Quarterly data based on the same records revealed less growth than what was being reported overall. Some economists even predicted a revision of over a million. Thankfully, the market didn’t have a mini meltdown over it all.
- ✂️ Cut. It. Out. - On Friday, Fed chair Jerome Powell told us to gear up for a mid-September rate cut. How big the cut will be is TBD, but Powell did say that the goal is to protect the job market from weakening further. (PS - this article explains the Fed and why you should care).
- 👷 Labor of Love - Speaking of weird math, we’re not really seeing any other *official* data that points to a labor market slowdown. Jobless claims are up, but still relatively low. Consumer spending is also healthy, according to retail sales data and company earnings reports. But, as us little guys know, the prices of essentials are still a pain in the wallet.
🔥Bottom line: We’ve been tracking wonky and confusing job numbers for a hot minute. When the talking heads get us all excited over what turns out to be a big nothing burger, it’s time to start looking under the hood. Check out this article where we break down all the cracks in the calculations.
What’s your take on the recent revision?
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