The differences between the BLS jobs report today and the ADP report on Wednesday are striking. Let’s go over some details. 
Last month the BLS jobs report showed a loss of 35,000 manufacturing jobs due to the UAW strike. This month manufacturing jobs rose by 28,000 according to the BLS but fell by 15,000 according to ADP.
Whereas manufacturing has a UAW strike-related explanation, there is no readily apparent explanation for the Leisure and Hospitality sector.
Leisure and Hospitality Seemingly Wild Differences
- ADP reports a loss of 7,000 jobs with this comment: “Restaurants and hotels were the biggest job creators during the post-pandemic recovery. But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024,” says Nela Richardson, ADP Chief Economist.
- The BLS reports a huge gain in leisure and hospitality with this comment: ” +40,000 almost entirely in food services and drinking places. Leisure and hospitality had added an average of 51,000 jobs per month over the prior 12 months.“
Those views seem at odds but the following chart puts things into proper perspective.
A noticeable downgrade in food services is underway according to both the BLS and ADP despite huge differences in the comments from each.
Key BLS Takeaways
- Government jobs expanded again, this month by 49,000. Last month government jobs expanded by 51,000. In September government jobs rose by 73,000.
- Employment surged by 747,000 easing the discrepancy between jobs and employment.
- Last month, the BLS estimated the UAW strike is responsible for 33,000 of the 35,000 jobs lost. This month the BLS reports manufacturing added back 28,000 whereas ADP reports a decline of 15,000.
Nonfarm Payrolls and Employment Levels
From September 2020 through early 2022, job gains and full time employment changes tracked together.
Starting around March of 2022 (red highlights), a divergence between employment and jobs became very noticeable. And since June of 2023 full time employment is down by 19,000 (green highlights).
Payrolls vs Employment Gains Since March 2023
- Nonfarm Payrolls: 1,615,000
- Employment Level: +1,077,000
- Full Time Employment: +133,936
Despite a big jump in employment this month, likely skewed by government jobs and the end of the UAW strike, there is continued weakness in the household survey.
A Caution on the Reports
Of the 894,000 rise in employment in January, 810,000 was due to annual benchmark revisions. And the BLS does not say what months were revised, just poof, here you go. We cannot, with strong confidence, suggest these reports portray an accurate picture of either jobs or employment.
With that background, let’s review the Bureau of Labor Statistics Monthly Payroll Report for November.
Job Report Details
- Nonfarm Payroll: +199,000 to 157,087,000 – Establishment Survey
- Civilian Non-institutional Population: +180,000 to 267,822,000
- Civilian Labor Force: +532,000 to 168,260,000 – Household Survey
- Participation Rate: +0.1 to 62.8% – Household Survey
- Employment: +747,000 to 161,969,000– Household Survey
- Unemployment: -215,000 to 6,291,000- Household Survey
- Baseline Unemployment Rate: -0.2 to 3.7% – Household Survey
- Not in Labor Force: -352,000 to 99,9562,000 – Household Survey
- U-6 unemployment: -0.2 to 7.0% – Household Survey
Change in Nonfarm Payrolls
Monthly Revisions
- The change in total nonfarm payroll employment for September was revised down by 35,000, from +297,000 to +262,000
- The change for October remained at +150,000.
- With these revisions, employment in September and October combined is 35,000 lower than previously reported.
The string of negative revisions to the jobs report continues.
Part-Time Jobs
- Involuntary Part-Time Work: -295,000 to 3,988,000
- Voluntary Part-Time Work: +323,000 to 21,862,000
- Total Full-Time Work: +347,000 to 134,840,000
- Total Part-Time Work: +339,000 to 27,005,000
The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported.
Hours and Wages
This data is frequently revised.
- Average weekly hours of all private employees rose 0.1 hour to 34.4 hours.
- Average weekly hours of all private service-providing employees was flat at 33.3 hours.
- Average weekly hours of manufacturers was flat at 40.0 hours.
An overall decline or rise of a tenth of an hour does not sound line much, but with employment at 160 million, it’s more significant than it appears at first glance.
A year ago average total private weekly hours were 34.5 hours. A year ago October, the average was 34.6 hours.
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 $34.10. A year ago the average wage was $32.80. That’s a gain of 3.97%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.12 to $29.30. A year ago the average wage was $28.09. That’s a gain of 4.3%.
Year-over-year wages are keeping up with inflation after underperforming for many months.
Unemployment Rate
The unemployment rate hit a 50-year low in January and April of 3.4 percent. It hit 3.9 percent in October, the highest since January of 2022, but is now back to 3.7 percent.
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 3.7%.
U-6 is much higher at 7.0%. 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.
The model is wrong at economic turning points and is also heavily revised and thus essentially useless.
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.
Expect a Long But Shallow Recession With Minimal Rise in Unemployment
Given hiring pressures and boomer retirements, I commented on July of 2022 Expect a Long But Shallow Recession With Minimal Unemployment Rise
That has been an accurate assessment to date.
Unlike many others, I still do not expect the unemployment rate will rise much in the next recession compared to the average recession impact.
Final Thoughts
This report is in some respects better than the headline numbers indicates as there was a noticeable rise in employment.
But impact of the end of the UAW strike gave an artificial boost to manufacturing reversing the artificial weakness last month. The continued dependence on government jobs also masks weakness.
The Jobs Boom Is Clearly Behind Us, So What’s Ahead?
The blue “?” is now reported as 199.
For discussion of the ADP private payroll report please see The Jobs Boom Is Clearly Behind Us, So What’s Ahead?
Despite the +199,00 jobs added this month, there is much underlying weakness.
A Big Decline in Quits Suggests the Labor Market is Back to Normal
Two days ago, I commented A Big Decline in Quits Suggests the Labor Market is Back to Normal
OK, so we are back to “normal” but where are we headed?
This is not a Nirvana setup. The Fed is walking a tightrope. The only questions are when and how the Fed makes another policy error and in which direction.
Expect a mistake. The Fed has a long history of them.
would you like fries with that?
UAW 2019-2023 contract gave the workers a total raise of 6% over the 4 years (the 2 bonuses were not rolled into base pay). During that same period, BLS inflation was more than 20%.
So the UAW workers were making about 14% less in 2023 than they did in 2019. Everyone is cheering the “huge” 11% raise they just got, but that still puts them 3% behind where they were in 2019.
It’s the same story with UPS drivers. Everyone thinks they got a huge raise but they are still behind where they were in 2018. It’s worse for the drivers in high COL areas because their raises are fixed dollar amounts, not percentages.
Lower and lower purchasing power, year in year out, is an inevitable side effect of life in a country in terminal decline towards third world staus. In Argentina, which arguably blazed the trail the US is blindly following, the experience has been similar for generations now.
Start bringing that number back down, just as fast as it went up!
Jeep employees learn of mass layoffs, just 1 Month after UAW Strike ENDS. This was of course expected, as are many more will occur in GV’ & EV’s Both!
The deal the UAW made was/is a Job wrecking machine! The Feds won’t let the Manufacturers keep making GV’s and the Consumers With the ability to buy, don’t want EV’s. Now layoffs to follow in both areas of Manufacturing as they can’t keep building vehicles they are allowed to build, that they won’t/can’t sell.
The “Clown Show” continues…
Step 1: Manipulate statistics for headlines so the dumb money steps back in.
Step 2: Revise statistics downwards 12 times in a row because…reality.
Step 3: Lather, rinse, repeat.
It sounds like a well-oiled and orchestrated plan, what in reality is the dumb chaos of statistinks. The only true data is the sound of rushing herd guided by the invisible hand.
Ah yes, the invisible hand of the market.
Which really is a tiny group of elite bankers manipulating the monetary system and enslaving mankind with a unsustainable debtburden until you end up with societal breakdown as we’re currently experiencing.
When you control the printing press, the media, academia and government and you STILL aren’t satisfied…there’s a special place in hell for you.
That only proves there’s no one who figured it out all.
Self-preservation of the ruling class would dictate moderation of greed for the benefit of survival.
With bread and circuses, there’s no need for moderation, and with population replacement, they don’t need your vote anymore.
“When you control the printing press, the media, academia and government and you STILL aren’t satisfied…there’s a special place in hell for you.”
Ditto when you are dumb enough to still keep falling for the trivialy obvious nonsense that there is anything; any tiny part whatsoever; of the “system” that keep those guys in control, which is worth preserving, at all.
The “control” guys at least get some temporary, relative benefit out of life in the worst governed, most dysfunctinal and totalitarian country on earth. It’s the remaining 95% and increasing, the ones who would be near infinitely better off if governed by the Taliban; as well as anyone else; instead, who are the real saps. Until they grow up and learn to read and/or count, they’ll just continue to live as chattel, indoctrinated slaves under the terror state’s jackboot. All while mindleslly regurgitating “we” “need” to “save the syyystem” every time their slavemasters tell them to jump and be pliant little drones.
4 the 1,000,000 time, a recession (aka negative job growth) isn’t part the tea leaf reading paradigm when Uncle Sam is spewing out nearly $2,000,000,000,000 in deficit spending. This fact, of course, doesn’t take into account a black swan event like FJB sending US troops to Ukraine.
Analysis upon analysis, Mish, isn’t going to bring forward or forestall a recession with the excess money being pumped into the economy.
We’d all be better off swagging when Uncle Sam will be forced to cut spending. Then we can start being concerned about a real economic downturn. Does anyone really have ANY IDEA of what a “soft landing” means? I don’t, and I bet JPowell & JDimon don’t either.
UAW is nothing compared to Chicago Teachers Union. 0 years warranty on the latter’s product.
Statiscal Noise . . . election year ahead . . .