Hard evidence from QCEW report suggests more negative revisions coming for BLS nonfarm payroll report.
QCEW data for this post is from today’s BLS release County Employment and Wages Second Quarter 2024.
Chart Notes
- The Quarterly Census of Employment and Wages (QCEW) is a dataset published by the Bureau of Labor Statistics (BLS). QCEW is comprehensive, capturing 95% of US wage-and-salary jobs. The sample size is 12.2 million establishments.
- The Current Employment Statistics (CES) Nonfarm Payroll Report comes out monthly. The sample survey is 629,000 individual establishments in 2024.
- The Employment Level is from the monthly BLS Household Survey that also estimates the unemployment rates.
For more discussion, please see BLS Quarterly Census of Employment and Wages: Concepts
Nonfarm payrolls count jobs. If someone has three jobs, they are counted three times. Employment is binary. You are either employed or you aren’t.
However, not employed does not mean unemployed. To be unemployed, you have to be able to work, and actively looking for work.
There’s a strict definition of looking that requites an interview or submitting an application, not just doing an online search.
Three Measures of Employment in Thousands
Three Measures of Employment Change in Thousands
Mish July 26, 2024: Expect the BLS to Revise Job Growth Down by 730,000 in 2023, More This Year
At the heart of these revisions is a horribly flawed birth-death model used by the BLS. My calculation closely matches an estimate by Bloomberg’s chief Economist.
Mish August 21, 2024: BLS Revises Jobs Down by 818,000 the Most Ever, About 68,000 Per Month
Do I get to say I told you so? My advance estimate a month ago was 779,000 lower. Bloomberg estimated 730,000.
The reports are not directly comparable, with precision, especially given the jobs vs employment discrepancy.
However, my prior comparisons and advance calls suggest we see negative revisions in nonfarm payrolls from 2023 Q2 to 2024 Q2 of well over one million. My initial stab is about 1.2 million to the downside.
The BLS Birth-Death model is seriously mess up an/or the BLS is oversampling large corporations and under sampling small businesses.
The BLS monthly nonfarm payroll reports are consistent garbage.
The BLS monthly nonfarm payroll reports are consistent garbage.
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This is why it is best to look at tax receipts and payroll taxes being paid.
The unemployment rate will increase when Trump and DOGE fire A LOT of Government employees.
There are roughly 3 million civilian federal govt employees (0.6% of population).
Defense and national security-related agencies account for nearly 71% of the entire civilian federal workforce outside of the US Postal Service. The Department of Veterans Affairs comprised over 20% of the entire federal workforce and even grew by 9% in fiscal 2023, surpassing 400,000 employees.
Unless he plans on getting rid of the military industrial complex, it won’t happen. My prediction is Trump will threaten bankruptcy of the United States as a negotiating tactic at some point during the next 4 years.
If Trump is smart he will touch the third rail and show Americans how bankrupt all the Federal Government’s retirement programs are. (Check the content of the Intragovernmental Debt balance.) After that he’ll get whatever he wants, as long as he promises to fix things,,,,some day.
We are still deep in inflationary depression mode with gov spending as the main driver. If the inflation can be stopped,the depression it has caused will linger on a while before the recovery begins. A lot of cancerous ‘growth’ and related ‘careers’ have to go kaput too. With the DNC on the outs, confidence will gradually return.
I hope you are correct, and you don’t say when it will return. But we and the world are in a mess. It took a long time to get where we are, and it will take a long time to fix it. I suspect that many are too optimistic about stability and a quick fix. Those on the outs will be as disruptive as possible, and the situation needs a step back [read downturn]—those are never politically popular.
Trump will fix everything. That is what he said he would do. Believe me when I say this.
This isn’t a depression yet, at least not for employment. It’s just the first downslope after the print-and-spend sugar high of 2021-2023.
This should surprise no one. The numbers have been changing as a regular occurrence. They go up when needed to, and then back down when needed to. Of course that depends on which way they want the market sentiment to go on occasion, and maybe whom they would like to see go up in value perhaps, but only they would truly really know… Maybe Gaetz can ask them?
That’s not how it works. Historically the BLS establishment survey always overcounts jobs into the start of a recession – it’s in the data going back 50+ years. It’s because the birth/death model is blind to the very thing that matters, which is small business employment that leads the cycle. The only deliberate nonfeasance is not fixing the obvious flaw. But the system isn’t being rigged in any other big obvious way – it doesn’t need to be.
The pattern of negative revisions and the uptrend in continued claims are part of the same historical pattern. And the big tell is the dropoff in total employment from the Household Survey, which has never been wrong in 80 years in providing advance/real-time warning of a recession starting.
You get to say you told us so.
I didn’t, “They Did” and they have been, which is why it should be of no surprise.
When Trump takes over the overstating will magically disappear. The understating will begin.
Trump is typically spot on with his numbers, when they count. Also His information and how it gets ultimately put down on the final document. I will guess He learned that from His Father? This is the main reason that they couldn’t and won’t find those types of errors . You cannot possibly, have thrown at you, what He did, and still be standing, unless you were open, honest, and have receipts to back it up, for where and when it counts…
Maybe he will inflate the value of US government real estate holdings the way he did with Trump properties. Then, he could leverage the banking system even more for money for people (the human fund).