Today, the BEA revised income lower for the last two months. More negative revisions to income are on the way.
Income Revisions
The BEA revised both current dollar and chained dollar income lower for May and June.
Chained dollars are inflation adjusted. The revisions did not impact the chained dollar percentages.
Spending Revisions
The BEA revised both current dollar and chained dollar spending higher for May and June.
The revisions boosted inflation-adjusted spending for May and June.
Annual BEA GDP and GDI Revisions
The BEA will report Annual Updates to the National, Industry, and State and Local Economic Accounts on September 26, 2024.
The update of the NEAs will cover the first quarter of 2019 through the first quarter of 2024 and will result in revisions to gross domestic product (GDP), GDP by industry, gross domestic income, and related components. The reference year for index numbers and chained-dollar estimates will remain 2017.
A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
On August 22, I listed A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions
Yesterday morning, I had difficulty finding the BLS job revisions. So did everyone else. Eventually the BLS posted -818,000 but my unadjusted calc of -915,000 is accurate too.
The 818,000 number is based on QCEW data. It’s a significant number of jobs and income. But ….
In accordance with usual practice [but not in the usual way], the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued in February 2025 with the publication of the January 2025 Employment Situation news release.
Revisions When? How?
- The existing employment series [monthly reports] are not updated with the release of the preliminary benchmark estimate.
- The BLS final benchmark revision will be issued in February 2025 with the publication of the January 2025 Employment Situation news release.
A Word About Bullsheet
In February of 2025, the BLS, in accordance with usual practice, will make revisions.
These revisions will not be monthly, or even quarterly.
It will be one big bang poof here you go update, with wild swings in the data. This will make all historical charts useless.
It is very difficult keeping track of all these revisions to jobs and income and what they include.
Don’t worry, there is nothing unusual about this. It happens every year.
But February of 2025 will be special because we will get 500 percent of the usual bullsheet, long after hardly anyone cares about how big the bullsheet was, and in a way that makes it difficult if not impossible to properly analyze for the few who do care.
August 2: Unemployment Rate Jumps, Jobs Rise Only 114,000 with More Negative Revisions
August 21: BLS Revises Jobs Down by 818,000 the Most Ever, About 68,000 Per Month
Regarding the -818,000 jobs revision, I expected some of that to hit first quarter revised estimates but that will not happen until next month per the BEA. “New QCEW data for the first quarter of 2024 will be incorporated in next month’s release along with the 2024 Annual Update of the National Economic Accounts.”
Thus the BEA will incorporate the QCEW revisions to income and wages faster than the BLS.
Are you thoroughly confused yet?
This reminds me of the poem Eletelephony
Once there was an elephant,
Who tried to use the telephant—
No! No! I mean an elephone
Who tried to use the telephone—
(Dear me! I am not certain quite
That even now I’ve got it right.)
I learned that poem in second grade and never forgot it. The last line is very appropriate to this post.
GDI is floundering at 1.3 percent (and soon to be revised lower) vs an alleged 3.0 percent for GDP.
The Gap Between Real GDP and GDI Increases to New Record $616 Billion
Meanwhile, as a result of the current revisions, please note The Gap Between Real GDP and GDI Increases to New Record $616 Billion
The BEA revised GDP from 2.8% to 3.0%. GDI is much more believable at 1.3% with negative revisions coming.
So, the job market was overstated which kept markets happy, but then just in time for the elections we get the real numbers so that the Fed has the excuse to cut?
Money is being spent hand over fist in the economy and unemployment is stable at low levels. Inflation is still more important than employment, and the Fed is making a mistake by starting a cutting cycle in September. Inflation will surge well above current levels within a year. There is an enormous amount of liquid cash sitting in banks, money market accounts, etc. to back up that claim. Furthermore, the government continues deficit spending hand over fist, adding accelerants to the inflation bonfire.
Folks made less, bought less, and spent more.
More folks are doing their spend down now too.
Buying the things they think they will need for a long dry spell while they still can.
And there it is in a nutshell.
Anecdotally, I’ve taken huge spending hits with taxes, insurance costs, medical costs from a wheelchair bound family member, fuel costs from having to aid aging parents, and two teens trying to find their way amid the employment quagmire. Income is limited and increases of outgoing means a lot less discretionary spending. My freezer stash is empty of meat grocery purchases. Thankfully, I am fortunate enought to garden and have been freezing and jar canning everything that it has produced for our next year’s worth of meals. Despite my planning, I know we will fall short. My once $150-200 a month grocery bill is now easily $500, and we can no longer afford it. I really don’t know how others are paying for necessities, much less for entertainment and the like.
Whoa, did the BEA just let the cat out of the bag, with some actual Truth? They actually admitted openly, that people in America made less money in May And June, so therefore we paid less in Taxes as well, and probably also missed a Dental Appt., Hair Appointment and cut back on groceries and specifically the healthy kind, as canned veggies start becoming the normal purchasing power once again, for the average Family.
Most of us have already taken huge spending hits with taxes, insurance costs, medical costs, fuel costs, etc. Most have long emptied their freezers, and bulk buying is a thing of the past. Gardening is helpful, but that requires money, time, access etc. and/or you must be in the proper environment to do so year round, which I am not. I grow as much as possible, but eat it all as it ripens for the most part. A big help financially just the same, so I am not complaining.
Q) I really don’t know how others are paying for necessities, much less for entertainment and the like.
A) I don’t either, but I can share some tips I have used that help a lot. I will buy a whole chicken at the butcher, and cut it in half (have them do it if needed). You can carve it all up as you would like, and plenty of soup as well! I have also found a love for thighs, which are less expensive, and absolutely delicious, IF you like the darker meat, which I do! They go a long way too! Maybe that helps you?
P.S. What’s Entertainment?
God Speed
The US is a uniparty government that is only interested in power for power’s sake and are thus political oligarchs that pay fealty through bribes from plutocrats to do the economic oligarchs bidding.
The US has for some time been corporate captured by regulatory agencies, the CIA has since the 50s has openly done the bidding abroad for Wall Street and US multinationals, MSM and social media have censored and propagandized in coordination with national security state, the education system promotes illiteracy and innumerates.
Statisticians are captured by the political oligarchs to report massaged “positive” numbers for the executive branch in power until monthly, quarterly or annual revisions occur that the financial MSM will gloss over because Wall Street advertisers prefer it that way. This is similar to big business capturing the big accounting firms to report and sign off on fraudulent reports. This is why the Pentagon has never been audited and the Federal Reserve only once after The Great Recession because the military- industrial complex for the former and the ABA want it that way.
The US is not that far away from corporate totalitarianism that will lead to techno-feudalism and ultimately tyranny of one corporate power or a melding techno-fascists into one CEO.
George Orwell prophesied it best in his 1984 epic.
“Now I will tell you the answer to my question. It is this. The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power, pure power. What pure power means you will understand presently. We are different from the oligarchies of the past in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just around the corner there lay a paradise where human beings would be free and equal. We are not like that. We know that no one ever seizes power with the intention of relinquishing it. Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power. Now you begin to understand me.”
― George Orwell, 1984
Gosh. You should get the hell out of the US. Where will you move to?
PapaDave, Another enlightened comment that adds nothing to the conversation through refutation or additive.
Lol! You think your comment was enlightened? There was nothing there worth refuting or adding to. You’re almost as bad as Stuki. Hundreds of words; adding up to nothing but another useless complaint about how bad things are in the US. Just another dumb f*ck, bitching and complaining endlessly.
So I will ask again. Where are you going to move to that is so much better than the US? I await your enlightened answer.
Red Herring.
I read an article this week about the inventory of pickup trucks and SUV’s piling up on dealers’ lots. My office mate announced he was replacing his SUV with a 4-door sedan. This is an important because previous recessions involved fewer vehicle sales proportionally. Opting for better fuel efficiency and lower ca payments is a major change in consumer attitudes. The SUV trend of 25+ years is over.
I appreciate the skepticism about government statistics by commentators on this site.
I just opened an invitation from the Commerce Department to participate in the ‘Business Trends and Outlook Survey (BTOS),’ with a request to respond within 5 days. I will be asked to report ‘three more times through mid-2025.’
Should I participate? How should I respond?
Excuse me for ‘crowdsourcing’ such sensitive information – I’m thinking this could be a chance to minutely influence the BTOS result before the data is released and criticized!
Please help.
They are desperate for people who won’t ignore them. Most people have just stopped reporting, which is why their data is meaningless.
Income is down while spending is up, and we STILL ARE NOT IN A RECESSION, officially at least.
It’s simply AMAZING what $1.92T in deficit spending does for our economy.
Home sales are up while interest rates are dropping like a rock.
Inflation is slowly sagging lower.
The Fed is about to do their part (i.e., election interfere) and cut rates soon.
And Joe Consumer keeps doing his part as well in addition to that top 25% who are literally powering the economy forward with their massive wealth gains from stocks, bonds & CDs.
Why can’t everyone just admit that we entered a soft landing 12 months ago when unemployment was still extremely low and is only up modestly, in part, due to people re-entering the work force?
Why is that so hard, Mish?
I think the way things are being handled, such as the high deficit spending, along with potential rate cuts, could cause a resurgence of higher or at least a continuation of moderate inflation/dollar to lose more value and increasingly more people to reduce consumer spending and spending on overvalued assets, this reduced demand causing more layoffs, assets naturally correcting, less wealth effect illusion, to clean the excess speculation and malinvestment out of the system. Inflation plus more tightening leading to lower demand for govt debt turning rates back higher forcing a reduction in deficit spending. Then things will finally land, getting us back to a healthy sustainable position. And we don’t need to debase the dollar to have healthy employment. That’s a fundamentally flawed argument. Businesses, industry, trade can grow best and establish healthily and naturally with sound money, no govt artificial interest rate suppression that reduces the value of people’s cash savings. Though hard honest work for the good of society will be fully accounted for.
Thing that matters is that people understand who is paying the Tab for the Administrative State which claims it is indispensable.
People complain quite a bit about how unaffordable Housing is, yet 30% or better of final cost to build is due to Administrative State mandates.
How could someone like me be able to make a fair estimate of hidden costs buried in Final Price? Happens me being a former contractor, still works on own Home.
Things that I do are at cost of materials since I do not charge myself for Labor. so when I add my cost of materials to an approximate Labor cost based upon me being the cost of labor, before Government adds its’ charges on top. This is then the Factory, so to speak base cost.
I then can compare my cost for production against what a Bid out Cost for that same work would be. My base cost of production ( materials and direct Labor) is typically 1/3 to 1/2 what it would cost to have a outside contractor do the same work.
Given a Contractor works for profit since they are not supposed to be a slave. Tacking on a reasonable amount for profit and office staff, all other costs which get added in go to paying for some Government entity sitting on High.
Even Mish can not figure out what the numbers produced by one part of the administrative state puts out are.
So be happy all those who believe Government solves everything cause you are paying 30% more then what a product should cost.
Do you feel better now?
Government rarely solves problems. And yet far too many Americans get caught in the trap of thinking that the next government will make their lives better. Neither Harris or Trump will make your life any better.
If you want a better life, forget politics and start working, saving and investing. Only you can make a better life for yourself. That is my frequent message here.
Government can make things a hell of a lot worse depending on who is in office. Like this reckless spending by tweedle dee and tweedle dum (Biden-Harris).
It’s never made a difference to me. I can find opportunities no matter who is in office. I did well when Trump was in. Even better with Biden.
Historically, the economy does better with a Democrat in the White House. But I can profit when there’s a Republican President as well.
That’s because I focus my energies on finding the opportunities, rather than wasting my time on politics.
Some people don’t see criticizing and debating candidates and policies as a waste of time. People can work full time and invest and still criticize and debate policies and candidates. Some people think bad policies by politicians, by manipulating the markets, making them less free, have negatively impacted prosperity and investing and that conditions for prudent investment could deteriorate further if policies get worse, so they speak out hoping to inform others who are less familiar, to hopefully create enough public drive to nominate and elect reform candidates committed to turning around the decline in national prosperity and investing conditions.
Yes, Thanks
I am not completely against debate or criticism of government. As long as it is civil. However, I have been listening to your argument for 50 years. And in that entire time, all I have seen is the political divide widen, and animosity and hatred grow. As far as I can see, endless criticism only leads to growing hate. So I do not share your optimism.
If Trump loses again, I wonder how much more violent the insurrection will be this time?
Isn’t this the opposite of what the FED and the public are hoping for when the interest rate cut appears? If so, why cut rates if people still won’t be able to afford to purchase a house?
Spending money you don’t have is what makes this country great.
People have come to realize that it makes no sense to bother saving when the money loses its value faster than you can save it.
Better to invest your savings, beat inflation, and grow your wealth.
Trump Says Abortion Should Be Legal for ‘More Than Six Weeks’
Campaign also unveils expansive proposal to support IVF in bid to allay voter fears of threats to fertility care
And in other unrelated news.
Brazil shuts down X. Fines Space X.
China hits 1200 GW of renewable power generation, 6 years ahead of schedule. Which represents 14% of their electricity capacity. Their LCOE is 40-50% less than their neighbours.
Musk offers to make Trump the “most famous man in the world” by sending him to Mars.
And RFKJ has joined forces with team Trump-Vance.
As for China, I think their biggest accomplishment in terms of renewable power is their Thorium Molten Salt test reactor. And unlike us, they’re investing heavily in 4th gen plants as well.
However, I am hopeful that Helion Energy beats everyone to viable fusion power 2028 and starts to sell MS energy for their data centers by 2028’ish.
I do not share your hope for nuclear in the near term. Perhaps longer term.
China is pursuing long-term nuclear goals, but their major focus remains on renewables.
Oh, I would agree that my position on Helion is definitely based on hope rather than realistic expectations. It will be interesting to see how they progress. Their Polaris reactor should come online this year. By 2025, we’ll have a better idea if they’re really approaching any sort of commercialization by 2028’ish.
And, I agree that China is eating our lunch when you look at the totality of what they’re doing across solar, wind, nuclear, including fusion or just about any energy source.
How’s you oil positions playing out? Still strong?
Thanks for asking.
I remain heavily invested in my core position in oils though I trade a portion of them daily as well. Buying bargains today after selling some the day before. I’m up over 20x on a few of them over a 4 year time frame when adding in dividends and trades.
I have bought and sold every
stock in the “falling knife” portfolio several times in the last month. Volatility provides opportunity.
The biggest thing about this, the aspect that gets me? It is the fact that THEY THINK that WE are so ignorant and incapable of analysis. AND, they THINK they are getting away with it OR they are IN OUR FACES AND NOT GIVE A SHEET!
Obviously, “they” are right, because people keep spending hand over fist. If anyone cared, they would pull back their spending, *way* back. A 1-2% drop in the price of goods after a huge 20% to 30% overshoot is a tiny correction in the overshoot. It is not what true pulling back on spending looks like.