The strange jobs reports continue as the divergence between jobs and employment widens again.
Please consider the BLS Employment Report for November.
Jobs vs Employment
From September 2020 through early 2022, nonfarm payroll job gains and full time employment changes tracked together.
Starting around March of 2022, a divergence between employment and jobs became very noticeable, and I have been discussing the divergence since then.
Job Stats vs One Year Ago
- Nonfarm Payrolls: +2,274,000
- Employment: -725,000
- Full Time Employment: -1,342,000
In the last year, nonfarm payrolls are up by 2.3 million while employment is down by 725,000 and full-time employment is down by over 1.3 million.
Job Report Details
- Nonfarm Payroll: +227,000 to 159,288,000 – Establishment Survey
- Civilian Non-institutional Population: +174,000 to 269,463,000
- Civilian Labor Force: -193,000 to 168,286,000 – Household Survey
- Participation Rate: -0.1 to 62.5% – Household Survey
- Employment: -355,000 to 161,141,000 – Household Survey
- Unemployment: +161,000 to 7,145,000 – Household Survey
- Baseline Unemployment Rate: +0.1 to 4.2% – Household Survey
- Not in Labor Force: 368,000 to 101,177 – Household Survey
- U-6 unemployment: +0.1 to 7.8% – Household Survey
Nonfarm Payrolls Change by Sector
Government and Health Services are related to the surge of illegal immigrants and the need to address them.
Monthly Change in Nonfarm Payrolls
Monthly Revisions
- The change in total nonfarm payroll employment for September was revised up by 32,000, from +223,000 to +255,000.
- The change for October was revised up by 24,000, from +12,000 to +36,000.
- With these revisions, employment in September and October combined is 56,000 higher than previously reported.
Nearly every month there are negative revisions. This was a rare month with positive revisions.
Part-Time Jobs
- Involuntary Part-Time Work: -100,000 to 4,457,000
- Voluntary Part-Time Work: +23,000 to 22,375,000
- Total Full-Time Work: -111,000 to 133,385,000
- Total Part-Time Work: -268,000 to 27,666,000
- Multiple Job Holders: +275,000 to 8,3580,000
The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported.
It’s important to not 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 0.1 hour to 34.3 hours.
- Average weekly hours of all private service-providing employees was flat at 33.2 hours.
- Average weekly hours of manufacturers rose 0.1 hour to 40.0 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.
Hourly Earnings
This data is also frequently revised. Here are the numbers as reported this month.
Average Hourly Earnings of All Nonfarm Workers rose $0.13 to $35.61. A year ago the average wage was $34.23. That’s a gain of 4.0%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.09 to $30.57. A year ago the average wage was $29.42. That’s a gain of 3.9%.
Unemployment Rate
The unemployment rate hit a 50-year low in January and April of 2023 at 3.4 percent. It’s now 4.1 percent.
“The unemployment rate has bottomed this cycle and will generally head higher.”
I first made that comment many months ago. If there was any doubt, it’s now erased.
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 7.8 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.
However, it is now clear that the BLS is too optimistic about the number of jobs they believe are being created by the net creation of new businesses.
A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
On August 22, 2024 I gave A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
Those negative revisions are a direct result of the BLS Birth-Death model gone haywire.
Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement
On November 20, I commented Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement
Hard evidence from QCEW report suggests more negative revisions coming for BLS nonfarm payroll report.
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 2024 Destruction of Small Business Employment in Pictures
The BLS payroll reports smack of oversampling large employers and undersampling small employers where jobs have been trending lower.
For more discussion, please see The 2024 Destruction of Small Business Employment in Pictures
Hi Mish, I admire your insights on the US economy. However, I do think the Fed, the WSJ and entire establishment are fully aware of the BLS consistently inflating payrolls through the use of the birth-death model. I think they are also fully aware that large numbers of small businesses are going bust, with unemployment rising, a lot more than is being reported by the BLS.
The truth is, and you even hinted this in your book, that the Fed is there to serve the interests of the upper class, to hold wages down, to serve the interests of big business and inflate asset prices. They couldn’t care less about small businesses going bust, it only increases the supply of Labor, thereby cheapening labor, all to the benefit of big business.
When the Fed speak of soft landing, they mean soft landing for big business, the small businesses and workers can all go to hell as far as the Fed is concerned.
Just note the current official BLS employment level – it’s lower now than it was when the Fed cut 50. The only difference is that the S&P 500 was on shaky grounds towards the end of last summer – and now it’s not. So the Fed will now turn a blind eye to any economic weakness, and continue to downpress on small businesses and labor, and further increase the market share of big business.
Mish
You indicated that multiple job holders increased +275,000 to 8,3580,000. This is a large increase and might help explain part of the payroll job versus total employed issue you have identified. I do not recall seeing this data in your earlier reports. Did I miss it? Where does the data come from? Have these large increases been going on for a while?
Yet illegal alien immigrants are up another uncountable million. Not to worry though, Biden’s HR dep. just removed military veteran hiring and promotion preferences to better allow for illegal alien diversity in reparations and equity. It’s all good in the District Of Criminals’ “hood. Expect more episodes of Cowboys and Aliens.
I don’t think many of these numbers are going to make sense given the wave of retirements in progress.
So here is a data question for those who can access the correct data sources. What fraction of the total Boomer population is currently retired? What fraction is drawing SS is a good start, but would miss those retired but not drawing SS yet, and also count those who are taking SS and still working.
Although it doesn’t answer your question, this is a good hint:
“The percentage of those ages 65 and older increased from 23% of the age 55 or older workforce in 2000 to 29.5% in 2023.”
If you google “workforce over 65”, you’ll see a bunch of articles that attack the statistics from different angles.
Ultimately it doesn’t matter because as the population ages across all age groups they can’t do the same level of productive work. It’s either physical decline (coal miners, oil rough necks, trades workers, etc) or it’s mental decline (accountant, doctor, lawyer, etc).
I’m sure a whole bunch of boomers will chime in and say they are as sharp as a tack but those are the exceptions not the norm and honestly many are just lying to themselves about their mental acuity. Just look no further at the ridicule of Biden, Trump, Pelosi, etc.
The problem doesn’t stop with boomers, GenX are retiring in droves (without SS) and they are also in physical and mental decline. The oldest Millennials are now 40+ and in 10 years they’ll start retiring too. And in 44 days, Trump will start deporting all that cheap affordable slave labor and future SS/Medicare tax payers exacerbating an already critical problem.
And lastly, America is fat, sick and unhealthy and the problem has been getting worse not better. This country will be top heavy socialists wanting nanny government to take care of them and the angry young being asked to pay for it all while they struggle to pay rent and put food on the table. It’s no wonder CEOs are getting shot in the back these days. Expect more of the same in the future.
Productivity is not a metric here.
And GenX isn’t retiring – it’s called “not working”. Been there, done that.
“This country will be top heavy socialists wanting nanny government to take care of them and the angry young being asked to pay for it all while they struggle to pay rent and put food on the table.” We’re already there, and “covid” sped it up by a decade. Two+ generations are already paying top dollar for absolutely every basic need from shelter to energy, so that the Boomer generation can continue to enjoy the absolute greatest standard of living seen in all of human history (for the non-nobility, anyway).
All that information would be on tax returns.
You could filter the returns by the “65 and older” box.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
—
Yes but on the macro level, employment is still trending slightly positive. The issue companies are having is still labor shortages. That will be exacerbated by Trump. The truth is America doesn’t have enough people that want to work. Free money during Covid altered human behavior to the point where even the productives want to be remote. We need a bad real recession with no safety net to make people realize that they need to work and show up in person.
Is the government still paying folks to not work? How can they afford to not go to work?
I was referring to the behavior that covid money induced. I think there are a good chunk of employees who are still remote.
But you said, “The issue companies are having is still labor shortages.” Sounds like you are referring to folks who don’t work since it’s a problem for companies and there is a shortage. Working remotely is still working so not sure how that even enters into the discussion on employment or backs up your statement on shortage.
Haven’t you seen how all the payroll numbers are padded/supported by government hiring? Not the same thing, sure, but it’s along the same lines to me. Even most of the health care jobs created are government jobs in the end, as Uncle Sam pays the Medicare bill. But in fairness (most) health care people actually do work their tails off.
Re “Yes but on the macro level, employment is still trending slightly positive.”
Disagree. I trust the Household Survey, which avoids all the bias built into the Establishment Survey (the Birth-Death model). The Household Survey says employment is trending negative (as Mish explained above). And ditto for the unemployment rate which also comes from the Household Survey.
The employment level from the Household Survey has an 80 year track record of being an excellent real-time / leading indicator for recessions. The Establishment survey data lags because it only becomes accurate after extensive revisions which take years.
The year-over-year change in Employment Level from the Household Survey is saying very clearly that the U.S. is already in the early stages of an undeclared recession:
https://fred.stlouisfed.org/graph/?g=1BZis
I guess we’ll get to check your theory in the next month or so when the BLS revises its household survey data. You say it’s better than the establishment survey. It sounds like Mish expects negative revisions?
But I’d love it if Mish wrote a blog on the odds of that happening. Many here discussed the divergence between GDP and GDI over a significant time period. And the result was that GDI was revised upwards, not GDP downwards. That negativity was revised away with the updates.
What if the household survey is similarly biased down currently due to the wave of immigrants entering in the last couple of years? How will the divergence Mish writes about be rectified? Will the establishment survey numbers be downgraded? Or will the household survey numbers be revised upwards with the immigrant numbers better counted? Results will be here in a matter of weeks
… but will that prevent them from shooting CEOs dead in the street?
I predict jobs will skyrocket next year after Trump’s policies have had a chance to gain traction. Just the replacement hires for all the illegals are going to be a big boost.
People on drugs don’t make for good employees.
Find me a white boy that’s going to cut broccoli 60 hours a week for $7.20 an hour, no overtime.
I’ll wait.
Why have borders at all?
You won’t, but my philosophy has always been, if your business model DEPENDS on labor so cheap that a legal American won’t do it at that price, then your business model is non-viable. EVERYTHING can be replaced with consolidation, automation or importation or something else, the market will find a way to fill the void. My father used to employ illegal aliens as bus drivers back in the 80’s/90’s, but when they cracked down, he had to adapt and accept lower profits. But his business model was still viable. Others weren’t.
Maybe we should accept higher broccoli prices as the cost of providing agriculture workers with living wages?
“replacement hires” – by definition – mean no net jobs increase (and likely higher wages costs BTW, as Mish has covered), much less “skyrocket” changes
You’ll have to mow your own grass.
Or pay a lot more, as is already happening. Jose’s kid doesn’t want to follow in dad’s leaf-blowing footsteps anymore. Although he might if he make a killing, so prices up and up. There will come a price where simply keeping the grass and trees won’t be worth it for some. Hello AstroTurf or rock gardens.
Or just let wild plants grow, like the British do.
“Median duration of unemployment has increased meaningfully. We are in a very different macro landscape then the first Trump term.” —Bloomberg
The economic crash that term caused has been papered over, and is waiting for him this time. No Obama economy to make him look good while he runs up the largest Devi it in history again.
Maybe the lagged effects of the Fed’s restrictive monetary policy and higher short-term interest rates for the past couple of years has finally taken hold?
Unemployment rate is coming up, as they wanted – to try to slow inflation.
Meanwhile, GDPNow was updated yesterday for an estimated 3.3% real growth rate (two months in) in Q4, following real rates of 2.8, 3.0, and 1.6 earlier this year
Possible but meaningless. The forward outlook is unclear because Trump is promising upheaval of the system.
I agree. The economic output and jobs are unlikely to change slightly over time any more, with Trump’s incoming major upheavals. But it’s what we collectively voted for. So we’ll reap what we’ve sown
Collectively, people voted for a 1.5% change.
Lies, damned lies and government “sadistics.”
Your mention of “disability fraud” is VERY real. We know of 7 different Cops and Firemen who retired in their 50’s claiming back problems from their jobs. THEY ALL DO IT. We lived in a mountain community in NorCal and 4 guys, all retired Cops, were ALL disabled and we seen digging post holes, and using tractors to plow, and yard work and ALL of them “felt great!”
All of them are FRAUDS scamming the system.
Musk should buy Tiktok which lost on appeal and must be divested from CCP parent Byte Dance. American jobs for American workers.
Is it possible that the large number of immigrants show up in the establishment survey, as they work, but not in the household survey, because they may not show up in any lists yet?
“CHI FED’S GOOLSBEE Q&A: MORE THAN HALF OF LABOR FORCE GROWTH WAS IMMIGRATION SO POLICY TO BE BIG INFLUENCE GOING FORWARD…”
Powell was out just the other day telling everyone what a truly good Boy he and the Fed have been.
Had to say they were only subject to Congress and completely independent.
Soon to see if Trump goes along with current policy outcomes.
My view, time to get someone who understands how to help the economy Grow rather then hurt it in as FED chair.
Trump wants interest rates at zero so he and his billionaire cronies can continue looting the country.
Interest rates at zero are what put the economy where it is now.
Stupid never learns.
Wrong word: these scum are SAVVY!
Actually Trump is using the threat of Tariffs to push back against all the Currency manipulation which has allowed the current Trade situation to occur.
He also knows that Growth can be accompanied by a low inflationary environment which will then bring down interest rates via market forces.
Everyone in US, unlike you and your friends, is not on board with using Poverty as a political tool of control. To force people onto government reservation so that they can survive. Some of us know that prosperity lifts all boats and can bring people up from hopelessness to a positive future.
… which is why he wants interest rates dropped.
Do you even listen to yourself?
Ask yourself which way produces a healthy economy with lower rates.
1) Bernanke, Yellen, Powell printing until there is no where left not distorted by phony Fiat. Government borrows and spends running up the Deficit until default or issuing new currency become only option.
2) The type of economy that runs on merit and Growth instead of government borrow and spend. Founded in rule of law and equality of opportunity.
Yes Trump wants rates down but how they get to go down makes all the difference for what is left of middle class America.
What are you talking about? The economy has had real GDP growth every quarter for the past four years. If COVID had not happened (which did not occur because of Fed actions), that would be true for the past FIFTEEN years straight
Did you miss the recent election? It appears that you have.
Trump won because Biden and the Dem plantation sucks.
Suggested therapy, get used to it and deal with it.
Lol. Clueless
Yeah, that half-century-low unemployment rate of 3.4% just absolutely sucked for all those poor people out there looking for jobs and unable to find them LOL
When the 0% money went away, so did those jobs.
Hmm… when was that… who was in charge… oh yeah, I remember now…
Typo: “ The unemployment rate hit a 50-year low in January and April of 2023 at 3.4 percent. It’s now 4.1 percent.”
It’s now 4.2 percent as noted elsewhere.
Looking forward to the Mish-McKelvey update with continuing claims plus longer/term unemployed data!
So my obvious question is this, Mish:
How many of these 355,000 newly unemployed Americans are able-bodied and could replace illegal immigrants working in residential construction / repairs?
That’s a lot of electrician / plumber apprentices, HVAC techs, framers, NO?
It’s nothing more than policy & national / individual will power. Well, okay we will have to wrangle builders & repair company owners into NOT hiring illegals, but that’s what we have white collar crime laws plus big fines & jail time for.
No problemo!
You think a lot of illegals are electricians and plumbers? This is a joke right.
MID, you are wrong. Legal immigrants from Mexico are skilled Carpenters, plumbers, cement workers and Electricians. You just are ignorant (not saying stupid).
David, to be a licensed plumber or electrician is incredibly difficult. If you are claiming these people are all doing work without it, ok maybe a few. Good luck to the people doing that they don’t get caught and that the work is up to code.
Did you miss my apprentices descriptor?
You’re playing semantics anyway. You know very well that illegals perform all sorts of licensed work under a contractor who pulls the permit.
It’s a joke that you’re raising this as an issue. Or maybe you actually live under a rock.
Most of the illegals lately are from Central America. If you think the average guy walking in from Honduras is going to be prepared to do code electrical, then you are hopeless
I agree with you, David. I hire contractors regularly. I don’t know squat about all his employees (legal or illegal), but only one person is needed to sign off on the final work. It’s up to the contractor to find whoever he wants/needs for all the basic work. If something happens, I sue and bankrupt the contractor. But I have seen lots of immigrants at my own and other projects and they generally seem to work hard and ably
Yeh well don’t turn the lights on if you do not know the qualifications of the person doing the installation.
Being a former contractor and having done some Fire restorations. When a house burns it does not just burn a little bit.
When it burns they have been signed off on and that did not stop the Electrical system from going poof.
Yeah, you’re right. The recent statistics highlight the number of houses burning down all over the country in the past two years from the shoddy illegal immigrant electrical work Biden allowed to happen LOL
Maybe you should get out more and take a look at what is being signed off on and called Housing.
If a person makes what will most likely be the largest expenditure of their lives without being reserved in what they accept as workmanship if not outright skeptical, they do themselves grave disservice.
The Learning curve begins immediately when the signature appears on that deed and the Bank becomes Landlord over your Life.
Much easier to be somewhat vigilant as to who does what before those walls get closed up and the decorator gets brought in to make things all pretty.
Biden made my shrubbery die!
Unemployment will continue to increase between all the government jobs that will decrease when the illegals are deported and DOGE.
These are positives. Private sector jobs the only ones that are additive to the economy
My uncle (an Army captain) would probably like to have a word with you outside, if you can wrestle yourself off your pontificating barstool
I didn’t say we should have no public sector jobs. But they are all funded through taxes. Not the other way around
There was a chart on a reputable news site that showed the square footage of office space of the major departments within the federal government. It gave a reasonable space per employee for the total # of people who should be able to work at the building.
All of the buildings were into the thousands of workers. The worst example was an on average of 5 people per day for something like 4,000 seats. It basically rounded to zero.
The federal government has become a joke in terms of productivity.
I’m very hopeful DOGE is going to beat us over the head with all sorts of revealing stats about how much reform there needs to be within all levels of government.
And once we find out about the waste, fraud & abuse just in the federal work force, let’s extrapolate that to SS, Medicare, DoD, etc.
So is his uncle a sucker, or a loser?
Well, now your tone sounds different than your original pithy comment. But it’s still all about the political POV with you. So you want to be divisive and condescending to those in the public sector. Whatever.
I bought a cheeseburger at a local diner today for lunch. Thanked the owner for the good food (that I could have made myself at home) and eagerly parted with my own private-earned-income dollars.
But I also got paid today by my employer. And federal, state and local taxes were deducted from my paycheck. Any yes, that money went to pay for my uncle’s Army defense for us, the firefighters that helped put out the grease fire for one of my neighbors this summer, and my kids’ public school teachers – who are saints in my POV.
But in your mind, only the diner owner’s cheeseburger is “additive to the economy”. Are all the rest of these services subtractive since they are funded by taxes? That’s quite reductive.
Does the inside of your personal political bubble smell as bad as it does from the outside?
Currency markets are starting to acknowledge Trump will be next President.
USD/JPY sold off strongly even into the announced good NFP.
Nations which have been allowed to pursue mercantilist policies under Biden are on notice. Trump verbal intervention in Steel sending a Loud and clear message. Along with Navarro back in the new administration as Trade advisor..
Cad dollar another one was weak so far. They have not abused monetary policy as egregiously as Japan. Trudeau getting seriously challenged and if Canada unloads him it will be stronger Cad dollar
So you’re rooting for us to get more paper promises and fewer goods?
In other words, statistics we should put a lot of weight on/faith in: “These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.”
“Nearly every month there are negative revisions. This was a rare month with positive revisions.”
Markets trade on the fictitious numbers, it’s a sinister sorta funny.
Truth closer to the household survey.
Dreadful. The employment-population ratio, at 59.8 percent, also changed little over the month but is down by 0.6 percentage point over the year.
Landscaping jobs are saturated.