Beneath a weak headline jobs number, the details are even weaker.
Initial Thoughts
The huge surge in employment levels in January were substantially removed in February.
23 months ago full-time employment was 134.4 million. It’s now 134.7 million, up by about 300,000. Nonfarm payrolls are reportedly up over 4 million in the same timeframe.
There was a huge increase in part-time work sending the U-6 unemployment rate to 8.0 percent up from 7.5 percent.
Total full-time work dropped by 1.22 million.
Job Report Details
- Nonfarm Payroll: +151,000 to 159,219,000 – Establishment Survey
- Civilian Non-institutional Population: +62,000 to 272,847,000
- Civilian Labor Force: -385,000 to 170,359,000 – Household Survey
- Participation Rate: -0.2 to 62.4% – Household Survey
- Employment: -588,000 to 163,307,000 – Household Survey
- Unemployment: +203,000 to 7,052,000 – Household Survey
- Baseline Unemployment Rate: +0.1 to 4.1% – Household Survey
- Not in Labor Force: +546,000 to 102,487,000 – Household Survey
- U-6 unemployment: +0.5 to 8.0% – Household Survey
Nonfarm Payrolls Change by Sector
Monthly Change in Nonfarm Payrolls
I suspect we will see some nasty negative revisions to November and December job numbers when the quarterly QCEW data is released.
Monthly Revisions
- The change in total nonfarm payroll employment for December was revised up by 16,000, from +307,000 to +323,000.
- The change for January was revised down by 18,000, from +143,000 to +125,000.
- With these revisions, employment in December and January combined is 2,000 lower than previously reported.
Part-Time Jobs
- Involuntary Part-Time Work: +483,000 to 4,937,000
- Voluntary Part-Time Work: +136,000 to 22,435,000
- Total Full-Time Work: -1,220,000 to 134,676,000
- Total Part-Time Work: +610,000 to 28,511,000
- Multiple Job Holders: +96,000 to 8,860,000
The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported. This month was wild.
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 was flat at 34.1 hours.
- Average weekly hours of all private service-providing employees was flat at 33.1 hours.
- Average weekly hours of manufacturers was flat 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.
Hourly Earnings
This data is also frequently revised. Here are the numbers as reported this month.
Average Hourly Earnings of All Nonfarm Workers rose $0.10 to $35.93. A year ago the average wage was $35.54. That’s a gain of4.0%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.19 to $30.89. A year ago the average wage was $29.67. That’s a gain of 4.1%.
Unemployment Rate
Reasons Why the Unemployment Rate Will Rise
- DOGE Government Firings
- Massive tariff and trade distortions
- General business slowing even before the above distortions
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 4.1 percent.
- U-6 is much higher at 8.0 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.
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.
Final Thoughts
Despite all the work I put into these reports, all of the BLS monthly data is total garbage.
I do the best with BLS data that I can, or anyone can.
The quarterly QCEW and Business Employment (BED)reports represent a 96 percent sample. But those reports lag by about 5 months.
The QCEW reports have been hugely negative and there is every reason to believe QCEW trends will continue.
Related Posts
January 31, 2025: The BLS Confirms US is Now Losing Jobs in Net Business Creation
The BLS BED report provides further confirmation the BLS Birth/Death jobs model is seriously screwed up.
February 4, 2025: Job Openings Drop by 556,000 in December, Quits Show Job Finding Stress
Job openings have collapsed. And the number of quits confirms people are staying put.
February 7, 2025: Huge BLS Benchmark Revisions Remove 610,000 Jobs From 2024
Every February the BLS does annual benchmark revisions for the prior year. This year there were huge revisions.
The first link above on BED is a key item.
The Birth-Death model that feeds the monthly jobs report is bogus. It has been screwed up since Covid, first underreporting jobs then overreporting them.
Someone accused me last month of downplaying strength in Q4 on the annual revisions.
Half wiped out today.
I will believe Q4 strength when QCEW shows it.
Amusingly, it won’t matter even if it did happen because of tariffs and DOGE
The Democratic Party and their government employees are a crime syndicate. Consequently government reports before an election are imaginary. Correction after the election is normal government behavior. Real data are electric power consumption, tax receipts, FICA, railroad freight, import export, credit card transactions, gasoline and Diesel fuel sales, auto sales, credit defaults, crime, retail foot traffic, marriage certificates, divorce rates, birth rates….
That great analysis. Thank you
The Biden years were dominated by government related hiring, including mass hiring of administrative medical employees, which is why we can’t afford our health care. Time to clean all this out, if the US is to ever enjoy a real economy again. The prior administration spent it’s ast 9 months cramming Federal Spending into the system to give the appearance of a good economy. The American people got hge bill. It’s coming due.
Could it be as simple as 2020 was the last true year of numbers over the last 4 Years? The year we didn’t discuss a Recession, but entered into one just the same perhaps? Ironically in Late 2021 the numbers advance their continual climb through 2024, and any talk of a recession is long gone, and the U.S. (aid) is doing just fine. Bring us to “Current Times”, and low and behold, after we start to unravel, and as a result, uncover the BS behind those 4 Years of numbers, and we find out that we have been, and still are in a recession.
It was papered over brilliantly (or with help?), and everybody bought it at first. Once reality set in and the gig was up, it started ripping apart at the seams. So do we now announce what’s real, take our lumps, and move on to a better situation, now that the truth has been laid bare?
MAGA!!!
looks like over the 5 year period of the graph there is a long term trend of more people working multiple part time jobs. Is there any other explanation of this?
Maybe Musk can fix the algorithms the BLS uses.
“I do the best with BLS data that I can, or anyone can.”
And we appreciate the work you, do Mike!
I’ve read before that the BLS #s are a complete WAG due to the lack of corporate participation (especially small bizzes) to actually report their headcount #s.
Is this true, and if so, can you state that in your articles so we all know what the participation rate is?
Yes, the data is crap, and perhaps very deliberately so. But you did a fabulous job parsing it, and with remarkable efficiency. Thank you very much for this and for all your insightful reports.
Well the stock market is at $1.4 trillion in losses from all time high. That’s the trump/GOP economy for you, losses, unemployment and (coming soon) violence.
Got PUTS? SPY broke below $570, next stop sadville.
OMG. Deep breath. We are about to go green. Humble always the way to go
Don’t worry, Trump/GOP will find a way to muck it up. Just wait and watch.
If they simply ramped up the National debt faster they could pump up the stock market even more.
Good God 6 weeks in…completely inflated economy…Air coming out of balloon… there’s going to be some pain for everyone 36 trillion debt pay more in interest payments than we do for defense.. keep printing a trillion more a year than we collect? I certainly know what the problems are not quite sure what the Solutions
Don’t you hate that? Every time a “New” President comes in, the last 4 Years gets blamed on them!
Biden crashes the economy, and hides the numbers, and after a few weeks in office, “ALL 4 Years” are muted down to 4 Weeks!!
Then these idiots behind him, start blaming “Egg” prices on the New President! You Simply can’t make this BS up if you tried!!
I’m with “You” MPO, and can’t stand it when past Presidents try to push off their incompetence on the New President. The Great News is that Trump and America just laughs at there sheer incompetence and behavior, so we got that going for US!!!
It might be the excessive spilling of government red ink was the only driver of asset prices. The stock market is a credit barometer. 3rd quarter adjusted Federal borrowing was at a $2.3 trillion annual pace. Think that was a real economy?
In other news, another Musk rocket blew up yesterday sending commercial aviation scattering for cover across the Caribbean, his Tesla stock is in free fall and he’s come out to announce that actually all those emails with his name on it firing people without cause aren’t his fault after all.
Wishing ill on people you disagree with is poor form.
It didn’t “blow up”! It experimented an unscheduled dissolution. Just like the stock market. All part of The Golden Age.
Be much more impressed with your vitriol when you put your first rocket into space.. last launch pretty impressive especially with capsule caught on reentry as I recall….. grew up liberal household dad was social worker for VA he would be so embarrassed by modern Democrats.. LOL..
I hope to see substantial negative growth on the government sector. The cumulative graft, waste & abuse there constitutes a substantial portion of what we call debt.
Something else that is touted in industry and by the left is “green” jobs putting up wind farms etc. Those are transient jobs, once a project is done in a year or two there’s no more jobs save a mere handful for mechanics & techs (I work in power, the amount of full time job loss going from baseload thermal plant to a windfall is greater than 90%).
“All of the BLS monthly data is total garbage”.
I do appreciate your effort to make sense out of it Mish. In many ways, it’s like trying to apply logic to those in a loony bin. Just don’t stay in there too long though. You will wind up in there.
A lot of these jobs are not coming back, which is partly why they are going away to begin with. Many will have to find new employment in a real field, with money behind it (Job’s) and they are willing to spend it. They will expect hard work and value for their money, and many are not used to that. The numbers could fluctuate even worse, as a result of this behavior. I doubt employment pictures will be clear for a couple more years (Mid-Term) perhaps?
Agree on waiting for the revisions. Much ado about nothing each month until you find out the real numbers