September 5, 2023
What the heck is going on at the BLS?
Since late last year, we’ve been talking about the employment situation here in the US. Specifically about how robust the employment situation has been in the face of some pretty dramatic layoffs.
We documented it all here if you want to stroll down memory lane:
- Will the Economy Change After Today?
- Is the Bad News Dam About to Break?
- But Wait… There’s More!
- The Fed’s Employment Narrative Starts to Crack
Yet in spite of all the raw data that had been suggesting the labor market was weakening… Every month the nonfarm payrolls numbers were up. In fact they were more than just up — they consistently beat expectations.
It was good and bad news for the Fed.
The good news was their rampant rate hiking didn’t seem to be negatively impacting the economy.
The bad news was their rampant rate hiking didn’t seem to be negatively impacting the economy.
They consistently hung their hat on the fact that everything was still OK (even though their job was to slow the economy, decrease demand and put out the inflationary blaze they started). Full employment means (theoretically) the economy is doing well.
Last Week Was No Different…
On Tuesday, the Bureau of Labor Statistics published their JOLTS report.
If you’re not familiar, JOLTS is their Job Openings and Labor Turnover Survey. It basically shows job openings and quits. Last week’s consensus estimate was for 9.57 million openings.
The print was well below that, coming in at 8.827 million.
On a year-over-year basis that number has been cratering…
Two days later, the Challenger Job Cuts came out. This is a report by consulting firm Challenger, Christmas and Gray detailing how many jobs employers have cut over the course of a month. The August estimate was for a loss of 26,000 jobs (up from the previous month’s 23,700 print).
The actual number came in at 75,151! An over 200% spike from the previous month.
So with these numbers reported, what might the nonfarm payroll number look like on Friday?
With the market expecting an increase of 180,000 new jobs, the print came in at… 187,000.
Yet another estimate beat!
What the Heck Is Going On?
We’ve been asking that question for some time now. But it appears that the Tylers over at ZeroHedge have hit upon the answer, and a pretty stunning revelation.
First thing to know, economic reports are almost ALWAYS revised for a month or two after their initial report. (We’ve explained how GDP is reported in three waves — an advanced report, a second revision and a final.) The problem is, it’s the initial reports that get all the attention. Even if the revisions paint a different story.
So what has ZeroHedge uncovered?
It appears that the BLS has been revising every report for 2023 lower after the initial print.
If you look at every final revision, they’ve been lower (sometimes significantly) than the original print. Add up the revisions for just this year and you get roughly 320,000 fewer jobs than reported.
The moral of this story is, the labor market isn’t quite as booming as they’d like you to think.
And the specter of a recession is still in the wings.
Humbly yours,
Tim Collins
Editor, Streetlight Daily