Counting negative revisions, there was unexpected weakness across the board in June, especially private and manufacturing payrolls. 
Before diving into all of the details from the June Jobs Report let’s highlight the ongoing peculiarities, underway for over two years.
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.
This month, employment rose by 116,000 vs payrolls up by 206,000.
Job Stats vs One Year Ago
- Nonfarm Payrolls (Blue): +2,611,000
- Employment (Red): +195,000
- Full Time Employment (Yellow): -1,551,000
Job Stats vs Two Years Ago
- Nonfarm Payrolls (Blue): +2,611,000
- Employment (Red): +6,280,000
- Full Time Employment (Yellow): +709,000
In the last year, nonfarm payrolls are up 2.6 million while fulltime employment is down 1.5 million.
Jobs Overview vs Econoday Consensus
- Nonfarm payrolls rose by 206,000 vs the consensus 189,000. But the BLS revised May from 272,000 to 218,000.
- Private payroll rose by 136,000 vs the consensus 160,000. The BLS revised May from 229,000 to 193,000.
- Manufacturing payrolls were -8,000 vs the consensus +10,000.
Job Report Details
- Nonfarm Payroll: +206,000 to 158,638,000 – Establishment Survey
- Civilian Non-institutional Population: +190,000 to 268,438,000
- Civilian Labor Force: +277,000 to 168,009,000 – Household Survey
- Participation Rate: +0.1 to 62.6% – Household Survey
- Employment: +116,000 to 161,199,000 – Household Survey
- Unemployment: +162,000 to 6,811,000- Household Survey
- Baseline Unemployment Rate: +0.1 to 4.1% – Household Survey
- Not in Labor Force: -87,000 to 100,429 – Household Survey
- U-6 unemployment: +0.0 to 7.4% – Household Survey
Nonfarm Payroll Change by Sector
Government and Health Services are related to the surge of illegal immigrants and the need to address them.
Social assistance jobs, a subcategory of private education and health services, rose by 12,000 in January; 25,000 in February; 8,000 in March; and 40,000 in April, 23,000 in May, and 34,000 in June, all as revised.
Government jobs rose by 60,000 in January; 55,000 in February; 78,000 in March; nothing in April, 25,000 in May, and 70,000 in June, all as revised.
Change in Nonfarm Payrolls January 2022 to February 2024
Monthly Revisions
- The change in total nonfarm payroll employment for April was revised down by 57,000, from +165,000 to +108,000.
- The change for May was revised down by 54,000, from +272,000 to +218,000.
- With these revisions, employment in April and May combined is 111,000 lower than previously reported.
Nearly every month there are negative revisions.
Part-Time Jobs
- Involuntary Part-Time Work: -199,000 to 4,220,000
- Voluntary Part-Time Work: -321,000 to 22,341,000
- Total Full-Time Work: -28,000 to 133,236,000
- Total Part-Time Work: +50,000 to 28,054,000
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 is flat at 34.3 hours.
- Average weekly hours of all private service-providing employees was flat at 33.2 hours.
- Average weekly hours of manufacturers was flat at 40.2 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 $35.00. A year ago the average wage was $33.70. That’s a gain of 3.9%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.10 to $30.05. A year ago the average wage was $28.90. That’s a gain of 4.0%.
Year-over-year wages are keeping up with year-over-year inflation after underperforming for many months.
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.
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%.
U-6 is much higher at 7.4%. 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 appears likely the BLS is too optimistic about the number of jobs they believe are being created that they don’t otherwise know about.
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.
Can the Jobs and Employment Numbers Both Be Reasonably Correct?
The answer is yes (discounting measurement error) because they measure different things. A person working three part time jobs counts for three jobs but only a single person employed.
I have repeatedly asked ADP to account for duplicate social security numbers but they won’t. Amusingly, the BLS wants to, but the employees tell me they can’t because “they don’t have access to the data for security reasons.”
This is a simple sort-merge program but alas, we depend on a phone survey for employment numbers.
Notably, discrepancies like these don’t last for years (at least shouldn’t) because measurement errors are presumed to be random.
Also, the unemployment rate is based off the same set of numbers. If the employment numbers are wrong then the widely believed unemployment rate is also wrong.
Closing Thoughts on the June Jobs Report
The discrepancy between jobs and employment is persistent and rising.
These monthly jobs reports (CES – Current Employment Statistics) are based on a 5.6 percent sample of the data. Job numbers based on the entire data (QCEW – Quarterly Census of Employment and Wages) lag by about 5 months.
The most recent QCEW data is from December of 2023.
2022 Q4-2023 Q4 CES vs QCEW
- CES: 155,211,000 to 158,269,000 (+3.06 million)
- QCEW: 152,525,000 to 154,848,000 (+2.32 million)
CES reports 32 percent more job gains in 2023 vs QCEW.
Nonfarm Payrolls NSA Minus QCEW
The BLS does not revise the previously reported numbers in its annual benchmark adjustments making the historical charts, including my lead chart, wrong. Jobs are overstated on all the charts.
For discussion of the difference between QCEW and the monthly jobs report please see How Much Does the BLS Overstate Monthly Jobs?
Finally, the rising trend in payrolls vs QCEW corresponds to the rising discrepancy between jobs and payrolls.
Expect more negative revisions to the monthly jobs reports.
The duplicate social security numbers problem is going to eventually be a gigantic problem for the SSA. Many are duplicates because of being sold to illegals. But only one person will get benefits. Lawyers will have a field day suing on behalf of illegals who paid into social security for years but aren’t legally entitled to benefits.
correct. anyone who has hired men in border states like AZ know there is a huge underground economy paid in cash and barter that the government and analysts like mish completely and understandably miss. towns from LA to EL PASO……..and beyond.
Household survey should still cover that. Establishment survey no
Do you think illegals working under the table for cash are going to report they are employed and accepting cash, to a government worker conducting the Household survey? I’d bet most of them don’t report they have a job.
A majority of job gains during the Biden Admin seem to be attributed to public sector (government) and healthcare (due to Medicaid and Medicare).
This year’s Medicaid budget is at least $100 billion greater than the Pentagon budget.
And I wonder if the jobs market is a lot worse than what is being reported by Biden’s Bureau of Labor Statistics.
It’s worth noting, that all the government spending on illegals (and government jobs created to do it) doesn’t produce anything for US citizens and taxpayers except a very large bill, and a new cow for the government to eventually milk or more likely for the government to support.
What’s really going on are two things. First, is the desire of the Democrats to flood red states with illegals to improve their election chances and political power (and fortunately they are mistaken that these are all D voters, or that their actions will have no negative effect on existing citizens’ votes for them). Second, the political class needs to grow the economy so it can forestall the bankruptcy of Social Security and Medicare and keep its promises to citizens about those programs. And the fastest way to grow the economy is for a huge immigration surge: most of them will go to work and start paying taxes.
But it would be a lot better if we actually screened immigrants and forbid criminals, those with communicable diseases, and those who don’t agree with the Constitution, and those who can’t or choose to not take care of themselves, from immigrating. Consider, we’d only be spending money on screening immigrants, and not supporting them.
IMHO, the more people know how much of their money is being spent on illegals the more they’ll vote against the Democratic party.
DOUBLE or TRIPLE the 7.4% and your are closer the the FACTUAL UNEMPLOYMENT number..
Not the PROPAGANDA number!!!
Nonsense. I don’t know anyone who wants a job and cannot find one.
Front Page – 500,000 Jobs Created – Economy Strong!
Page 5 one month later… Actually it was 100,000 Jobs
Mish, what is going to trigger the FED to begin tapering? IS it employment numbers? CPI?
Which is it? WHAT WILL TRIGGER THAT?
MAKE YOUR BETS: THE ECONOMY SAYS THAT IT’S TRUMP’s ELECTION TO LOSE
Ever since WW2 with one exception that I will explain below, if the unemployment rate rises in the second quarter of an election year, the incumbent party’s candidate has lost.
Second quarter unemployment rose in 1952, 1956, 1980, 1992, 2008, and 2020. Only in 1956 did party control of the White House not change. Dwight Eisenhower was reelected that year in spite of a small increase in UE between March and June. In all of the other years, party control shifted.
The same principle worked in reverse, with one exception. Second quarter UE declined in 1948, 1964, 1972, 1984, 1988, 1996, 2004, and 2016. Only in 2016 did control change, when Hillary Clinton lost.
Why does this work, and what about the exceptions? It works because if you need a job but don’t have one, it’s scary and even soul crushing, and this translates into voting behavior in the next election. If more people are working, it goes the other way. To quote James Carville in 1992, “It’s the economy, stupid.”
The 1956 exception occurred because, other than unemployment, which rose only slightly that spring, other economic indicators were strong. The 2016 exception has an asterisk, because Hillary actually won the popular vote. She lost in the electoral college because her support was unbalanced — much more in CA, NY, and IL, providing the popular vote cushion. Her late decision to campaign in Arizona rather than Pennsylvania, Wisconsin and Michigan likely booted away those states.
WHAT ABOUT THIS YEAR?
Unemployment was 3.8% in March, and now it is 4.1%. It rose by 0.1% in each month of the second quarter. A range of other economic indicators — gross domestic product, home construction and sales, real final sales, Institute for Supply Management reports for both services and manufacturing, consumer confidence — are flashing red or yellow.
Unlike in 1956, which was trendless but strong, this year’s economy is clearly weakening. I expect further weakening, and in fact the start of a recession in the third quarter that began in July. In fact, it could be that a recession started in June.
BOTTOM LINE: BET ON TRUMP
Even if Biden’s mental state was not at issue, he would be facing a stiff economic headwind this year. Forget about the stock market. People don’t spend the S&P 500, the spend their paycheck. Notice that the Democrats are no longer touting “Bidenomics?”
The risk to this forecast is that the New York judge throws Biden in prison this fall. It would be an historic act of desperation and destabilization, but you never can tell.
ADDENDUM
I am a politically independent “double hater,” which seems to anger lefties much more than it angers wingnuts. I cast write-in votes for president in 2016 and 2020, and will do so again this year. I learned of the unemployment/election correlation about 30 years ago, and was intrigued. It has worked since then with a couple of statistical wrinkles. We shall see this year.
I assume you meant to say throw Trump in jail—an excellent Freudian slip, though.
BTW, Martin Armstrong is fond of saying, “Change the economy, change the politics.”
Thanks for the data.
Prison, jail. I don’t know enough about New York to say where he would go. At this point, I think it is their only hope.
I told ya’ll when he was charged… he’d never go to jail… cuz it’s all fake https://fasteddynz.substack.com/p/what-if/
Trump is playing the role of the blow hard villain
NO, it was the “DEPLORABLES” label that she stuck on the undecided, and she THOUGHT that label may only apply to REPUBLICANS. I knew many people on the fence back then and they votes RED.
“Bidenomics is working!” “The vaccine is safe and effective!” “Subprime is contained!” “Epstein didn’t kill himself!” “Saddam Hussein has weapons of mass destruction!” “Trump colluded with Russia!”
I think you mistyped your sarcasm because Epstein didn’t kill himself. Maybe it was a test to see who reads your entire comment!
Yeah, he got that one backwards.
Yeah, I got that one backwards. 🙂
Yes but Trump was in play when Operation Warp Speed kicked off + he is still recommending the Death Shots
Ever though that the two of them serve the same master? https://fasteddynz.substack.com/p/what-if/
It appears that 4% US inflation is baked in the cake for at least a couple of years.
Yes, because of shortages, interest rate changes will not work. The Fed has no bullets for this type of inflation. Additionally, if we get into a war, it will get much worse.
Shortages of what exactly?
Long-term, thought-through, Government policies.
Off topic, but Biden just said in a radio interview that he’s the first black woman to serve in the white house.
https://www.businessinsider.com/joe-biden-proud-first-black-woman-serve-white-house-slip-2024-7
This is insanity. They need to pull the 25th amendment on this old fool TODAY. I don’t care if Harris is a dope. Biden is a dope, too, and at least Harris is lucid and stays awake past 4pm.
Trump stays up til 2:00 AM, wakes up at 5:00 AM, has a Diet Coke and some KFC and is ready to do some Trump-level shit. You either like that or you don’t.
He is just as much of a joke as Biden… in a different way.
World Wrestling Federation characters
He has the right to self-identify as a black woman if wants too.
LOL!
Yes, it’s better than identifying as a president.
I self-identify as a White Man who Identifies as a woman, only when asked by a hot babe and I have a penchant for Woman and thus I am a lesbian.
All that it takes is red lipstick, in a dark bar.
REALLY? Are you saying that you want the possibility of that CACKLING ASS as Pres?
Or it’s fake? He’s acting? If he is THAT befuddled… the Dems would have removed him long ago….
He’s playing the role of the confused president (see Idiocracy – the movie)