Yesterday, the BLS released a little-read jobs report that shows reported jobs in 2023 may be wildly overstated. In turn, that means GDP is likely overstated as well.
BED Chart Notes
- Data is from the BLS Business Employment Dynamics (BED) report and the BLS monthly jobs reports (CES).
- BED data is less timely but far more accurate than the BLS monthly jobs reports/
- For 2023 Q3, the BED reports shows gross job gains of 7.559 million and gross job losses of 7.751 million for a net loss of 192,000 jobs.
- The BLS monthly jobs reports show a gain of 640,000 jobs.
BED Job Gains and Losses by Quarter
Summary of Major Differences
Note that BED data is based on 9.1 million establishments while the monthly jobs reports are only based on 670,000 establishments.
The monthly reports are timely but inaccurate. And the BLS annual benchmark revisions do not also revise the monthly numbers. This makes year-over-year comparisons inaccurate as well.
I created the lead chart by netting BED data and comparing the BED net jobs to net quarterly jobs from the CES data.
BED vs CES
- 2023 Q2 BED: +332,000
- 2023 Q3 BED: -192,000
- 2023 Q2 CES: +821,000
- 2023 Q3 BED: +640,000
CES Overstatement
- 2023 Q2 CES Overstatement: 489,000 Jobs
- 2023 Q3 CES Overstatement: 832,000 Jobs
- Q2+Q3 Overstatement: 1.321 Million Jobs
Thus, the BLS says that the BLS monthly job reports for 2023 Q2 and Q3 are overstated by a total of 1.321 million jobs.
Jobs Up 303,000 Full Time Employment Down 6,000 in March
In March, the economy continued to add a high percentage of government and social assistance jobs. Part time employment rose by 691,000 as full time employment fell by 6,000.
Not that anyone can trust the numbers, but the most recent jobs report shows Jobs Up 303,000 Full Time Employment Down 6,000 in March
For all the faith put in the monthly establishment CES Nonfarm Payrolls, the household survey provided a much more believable set of numbers (red and yellow lines).
Payrolls vs Employment Gains Since March 2023
- Nonfarm Payrolls: 2,927,000
- Employment Level: +642,000
- Full Time Employment: -1,347,000
Payrolls vs Employment Gains Since May 2022
- Nonfarm Payrolls: 6,205,000
- Employment Level: +3,152,000
- Full Time Employment:+264,000
Payrolls are up by 6.2 million since May of 2022, but full time employment up only 264 thousand.
Change in Gov’t and Social Assistance Jobs
What jobs are being created now are of dubious quality. The percentage of government and social assistance jobs to take care of the illegal immigration surge is staggering.
Denver Migrants Make 20,000 Emergency Visits
I discussed Denver on January 24. Please note Denver Health at “Critical Point” as 8,000 Migrants Make 20,000 Emergency Visits
The Denver hospital system is turning away local residents because it is flooded with migrant visits.
What’s happening in Denver is also happening in Chicago, New York City, and all the other migrant havens.
2024 Q1 GDP Underperforms Expectations at 1.6 Percent vs 2.3 Percent Expected
This morning, I reported 2024 Q1 GDP Underperforms Expectations at 1.6 Percent vs 2.3 Percent Expected
First-quarter GDP was lower than any estimate in the Bloomberg Econoday consensus range of of 1.7 percent to 2.8 percent. Inflation was higher than expected.
Expect Negative Revisions
Expect major revisions not only to the annual BLS benchmark revisions, but also to GDP.
The BED report lends huge credence to the idea that GDP data is overstated and Gross Domestic Income numbers (reflecting payrolls) are more accurate.
Was talking to large institutional traders. They are really cooking the books. They were able to get a pump off earnings. A lot of games being played and market manipulation. Analysts and companies make sure things are underestimated so earnings beat. They can rotate stock sell strength.
There is Bad news, Real Bad News and Very Real Bad News. Adjusting
gross GDP for inflation gives us Real GDP. Inflation does not build sustainable GDP so it gets excluded. Very Real GDP should be what we focus on. That is what
you get when you subtract DC, (Deficit Spending, the amount the national Dept
went up during that period, because it is also not sustainable).
Bottom line: The deficit is 8% of GDP therefore our 1.6% GDP gain is really a 6.4% loss. Use the Very Real GDP when you compare results.
I literally don’t know a single person in the last few years who’s been unemployed unless they chose to not work or retired. Unemployment isn’t the issue.
https://justdario.com/2024/04/stop-dreaming-the-us-economy-has-been-in-a-recession-since-q2-2021/
What we need is another booster shot for Covid … to maim and kill a few hundred thousand more working age folks…
That will free up some jobs.
Don’t forget gender-affirming care for 7 year olds.
Hertz to sell 10,000 more EVs than planned, and stock suffers record plunge
https://www.marketwatch.com/story/hertz-boosts-number-of-evs-it-plans-to-sell-by-50-and-reports-a-much-wider-than-expected-loss-a51be7c0?mod=MW_article_top_stories
hahahahahahahahahahaahahaha…. the bad news keeps on coming!
What cannot continue – will stop.
What makes no sense – will stop.
It’s stopping!!!
Yep. Pain coming. The U.S is no longer investible
surely a 44.5% capital gains tax
and elimination of stepped up cost basis
will only HELP
Agree. Deflation is going to eventually come. 2009 style.
Academics (in overpriced colleges and in government) keep saying deflation is coming… yet prices in the real world keep going up.
Then you redefine deflation to mean something it never used to be, and you are proven wrong by real world events.
The problem is you keep trying to push marxist nonsense, instead of dealing with the real world. Prices have been going up every year. No deflation.
Some people has early access to this data and can make smart investments while public is blind…
Prove it.
Excellent missive, Mish.
I agree. I am critical of Mish in other respects, but I stick around mostly for his excellent analysis of the economic data. I had not heard of the BED reports until now, and think they shine a light on why most people are not buying the economic boom mantra. This was a very, very good catch on Mish’s part.
Would I be correct to think that there is a 6-month lag between the release of monthly UE reports and the quarterly BDM data, and that the lag becomes 9 months until the subsequent quarterly update?
Past that, when I looked into the report, it shows a trend of weakening employment since the middle of 2023. Also, 1 year business survival rates look like they sharly declined last year.
once we’ve all been shifted to 1099 & part-time employment, they’ll pitch the UBI canard again, expecting a better reception.
it’s all sooooooooo predictable.
Slightly OT, but if the economy is so great, why is there a huge amount of deficit spending ($2.2 trillion annualized)?
If there are 150 million federal taxpayers, that amounts to $14,666.67 of funny money spending per taxpayer that’s not coming from the taxpayers themselves.
$5k or more in freebies for every “migrant” (illegal alien) + sending hundreds of billions oversees to spill blood-for-ego.
it adds up.
setting fire to cash would be slightly more productive (heat).
The real question is “what would be the GDP of the USA if it couldn’t borrow?”
Eventually, that will happen. Slowly at first and then all at once.
^this. We’re maintaining 2% (and falling) GDP growth with deficits equal to 9% (and rising) of GDP. And upper class Dems wonder why the rubes don’t credit Biden for the stellar economy. People will vote based on their own “lived experience” – which mostly sucks.
Because the US is the best thing going in a bad neighborhood.
Don’t expect any revisions of consequence until 2nd week in November.
As someone who had two jobs that called on me to look closely at government economic statistics, I don’t think that the numbers have ever been manipulated for partisan motives. There simply is no evidence for it, and at the time I looked closely for signs of it and never found evidence.
There are genuine conceptual issues, and at times the data have been flawed, the best example being quality adjustments for services that had the effect of understating productivity gains and overstating inflation in the 1980s. Another example was in 2011, when the BLS changed its seasonal adjustment methodology for the monthly UE numbers, resulting in an overly optimistic view of that year and an overly pessimistic view of 2012.
Still, these flaws have never, to my reading, being tweaked for partisan purposes. If the evidence had been there, I think I would have found it. The BLS, in particular, has longstanding procedures to prevent this from happening. This isn’t to say that there aren’t errors, but only to say that errors are not on purpose. Take a close look at the data and methodology, and you will see that there are daunting conceptual issues.
I don’t say any of this to defend the Biden administration, which I think is a disaster on wheels, but only to state my firm belief that the statistical data are collected and analyzed in good faith within the agencies. If there is bad faith (and there most certainly is), it happens in how the political types outside of the agencies spin the data, but not within the agencies that collect and release it.
Finally, my endorsement is limited solely to economic data. I have become suspicious of cause of death numbers out of the CDC pertaining to covid vs the flu, but that’s a different agency and a different kettle of fish. The economic data have their flaws, but those flaws are not the result of partisan manipulation.
I’d like to hear your take on the fiasco that is healthcare within the CPI reporting. Wolfstreet.com had an extended series of articles on that last year. A significant fraction of the “disinflation” narrative last year was due to clearly erroneous revisions and adjustments to the CPI healthcare component. Oddly, it sounds like the induced error is now being corrected in the other direction, but at a much smaller rate. It’s hard to imagine other-than-political motives for overdoing a downwards effect on CPI, while under-doing the upwards adjustment… I would add that even if there is no overt political manipulation taking place, there is still the reality of general political bias / groupthink among the federally-funded economists.
Wolfstreet is a joke. I followed them for a while and the left laughing at them. The BLS people who collect and distribute the numbers are not economists. They are classic technocrats. They have made mistakes and will continue to make mistakes, but I have never seen any evidence of political manipulation. Health care prices are notoriously hard to measure and compare.
I support the idea that the BLS is not making errors for political reasons.
I understand the cynicism about it, given what a mess so much of the federal government has become, but not when it comes to the data collected and issued by the BLS.
What about the group think part? (in wisdom seeker’s comment)
Government technocrats are not independent thinkers, and they are not known for questioning authority (unless they are asked to stay late). They were told to put this number here, that number there, and don’t think about why. They just obey.
If the political appointees tell them to use a new formula, the bureaucrats obey. And they leave their taxpayer supplied office promptly at 4:50pm, in the parking lot ready to leave the premises at 5pm.
Agree. But every president since Reagan started counting jobs differently and more to their benefit. All kinds of shenanigans go into rules on how to classify which sector is what.
Please detail this. Reagan left office 35 years ago, and I have forgotten any stats changes. Be specific so I can look it up.
I worked there and it does not allow political manipulation. However, there is internal pressure from management to smooth the data. When I worked in prices, if a legitimate report was too large of an increase, it would not be accepted. The agency is not directly influenced by politicians, that is a conspiracy theory..
Longer comment. Editing time expired on the shorter one.
Wolfstreet is a slanted, impressionistic, narrative-driven mess. I followed them for a while and the left laughing at them. Anyone who takes them seriously deserves what they get.
The BLS people who collect and distribute the numbers are not economists of the kind you are implying. They are classic number crunching technocrats. They have made mistakes, pretty much all of them conceptual and/or driven by monthly deadline pressure. They will continue to make mistakes, but I have never seen any evidence of political manipulation.
Health care prices are notoriously hard to measure and compare. I frankly don’t know what the methodology is. If I were asked to devise it, I think I would start by realizing that government pays half the bill. I would look at per capita outlays for Medicare, VA care, and Medicaid, and costs of Part B, Part D, and private insurance premiums including wraparounds, and copays. I might also look at OTC medicine price changes. And guess what? I’d be wrong about something big that matters.
All in all, what a comparability nightmare compared to tracking other price changes. Monthly heathcare inflation numbers should be taken not with just a grain of salt but the whole shaker, but not because anyone is slanting the data for political reasons.
Government is like Hal. It has become self aware and is in self protection mode.