I calculated -915,000. Every headline said -818,000. I finally gave up and posted 818,000 but noted a discrepancy. I believe it’s -915,000.
Using BLS QCEW data, I calculated a year-over-year decline of 915,000 jobs.
I delayed my post this morning for hours trying to match 818,000. I gave up, reported 818,000 but also posted the above chart from my calculation.
Moments ago, I received a note confirming my calculation.
Note from Conrad Dequadros of Brean Capital
There is more that goes into the prelim. benchmark revision estimate than just QCEW and we are still waiting for the BLS to update its page summarizing this estimate, but the QCEW is out and it shows not seasonally adjusted employment in the 12-months through March 2024 at 2.042 million versus NSA payrolls at 2.957 million (i.e., 915K lower)
The above via email.
I delayed my post figuring I missed a revision somewhere. I kept downloading QCEW data directly waiting for a change that never came.
Here is my post this morning: 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.
Apologies for being overly optimistic.
I am struggling to match 818,000 this morning. Using unadjusted numbers, I calculate a discrepancy of 915,000.
68k downward revision per month on average. (My estimate is higher).
My “most ever” headline may be incorrect. 2009 may have been higher, but I would like to see a consistent calculation of seasonal vs unadjusted numbers.
For the record, I estimated -779,000 in advance vs -730,000 by Bloomberg.
On July 26, 2024 I commented Expect the BLS to Revise Job Growth Down by 730,000 in 2023, More This Year
Apologies for being overly optimistic.
Mish’s QCEW Spreadsheet
How Do We Get 818,000?
I believe 818,000 was first reported by Bloomberg, then copied everywhere by everyone with few questioning the number.
Five Possibilities
- The BLS created a seasonally-adjusted number and gave it to Bloomberg without publishing it.
- The BLS published 818,000 but where?
- Bloomberg made an estimate of the seasonally-adjusted number and reported it, without specifying it is their adjustment. Everyone copied the without question.
- Bloomberg or whoever was first in reporting 818,000 made a bad calculation using a mix of seasonally-adjusted and unadjusted numbers.
- Something else, but what?
The problem with #4 is that I cannot arrive at 818,000 no matter how I mix the numbers. Am I missing something?
Option #1 is the most interesting.
Who is it that would want to make this revision as small as possible?
I am not saying that is the answer. I am open to all of the other options, including #5 “Something else, but what?”.
Regardless, I am now confident my calculation is correct.
Nonfarm Payrolls Seasonal Adjustments
Unadjusted numbers are generally worse in Q1 because of strong seasonal layoffs in January.
So, I am not saying 818,000 is necessarily wrong, I just want to know how we got the number and why everyone copied it without question. Also if it is a seasonal adjustment someone should say so,
Did the BLS go out of its way to report an out-of-the-ordinary unpublished seasonal adjustment?
That may or may not be it. I just want to know how we got there.
In my previous post, I stated “68k downward revision per month on average. (My estimate is higher).”
My estimate is easy: 915,000 / 12 = -76,250 (on average, year-over-year), but that is unadjusted. I do not have a seasonally adjusted number but an adjusted number would definitely be higher (less negative).
Regardless there are several important points of note.
Five Important Points
- The Fed is setting fiscal policy based off incredibly bad sets of numbers.
- The market is reacting to incredibly bad sets of numbers.
- The Congressional Budget Office is making calculations based off incredibly bad sets of numbers.
- Personal income and Gross Domestic Income will be revised downward
- The personal saving rate will be reduced from its already very depressed level of 3.5 percent.
Those are the bottom-line implications no matter what number you believe.
Don’t tell me that +2,042,000 million jobs year-over-year (yellow highlight in above chart) is such a great number.
2024 Q2 and 2024 Q3 numbers will be increasingly poor. There have been negative revisions in nearly all economic reports.
This is a very recessionary trend. It looks bad because it is bad.
Improving the McKelvey Recession Indicator, No False Negative or Positive Signals
Yesterday, I commented Improving the McKelvey Recession Indicator, No False Negative or Positive Signals
Adding the job vacancy rate to the McKelvey (Claudia Sahm) recession signal eliminates false negatives and false positives, and provides a much faster signal than Sahm.
Since 1953, every time the economy was in the current state, the economy was in recession.
That does not make the odds 100 percent because everything is up to the NBER, the official arbiter of recessions.
My recession post is on the complicated side, but please check it out.
“I believe 818,000 was first reported by Bloomberg, then copied everywhere by everyone with few questioning the number.”
Parroting.
I don’t believe any numbers this Admin. puts out.
Golly – our government lied to us? Next thing they’ll be telling us the Fed isn’t really a benevolent institution. Then what – there is no Easter bunny?
Keep doing yard sales😄
The full blown inflationary depression is here and snowballing. Phase 2, massive shortages are already starting. Trillions more fiat will be injected into the banks to hold off the dreaded R recession, and maintain the cronie’s unearned ascendance, but it can only accelerate the chaos and displacement of the real economy. They don’t care any more. The gloves are coming off. It will get ugly.
Don’t matter early voting is coming up very soon. By the time the media starts reporting, the election will be over. That was the original plan.
Dog shit in … dog shit out… then revisions…
What is the point in even trying to analyze any of these numbers?
The data is already on the official website!
https://www.bls.gov/ces/notices/2024/2024-preliminary-benchmark-revision.htm
Correct – I did not find it because of a delay.
Massive F U at the BLS this AM.
So I worked on the unadjusted numbers.
Both sets are correct. One more post coming.
How am I suppose to run a proper hedge fund when I can’t rely on current govt statistics being correct?
You need algo software to monitor the lies and invest based on them…
Do your own due diligence?
Just invest in what the Soros klan invests in, and you won’t go wrong.
Santa Kamala will correct the job deficiency with more government jobs.
$4 trillion yearly Federal government deficits by the end of Santa Kamala’s first term. $6 trillion yearly by end of Santa Kamala’s second term.
I feel broke.
So if it’s obvious we’re already in a recession,is the market really gonna keep going up, just because the rates are dropped .5 ? It’s complete Lunacy
It very well might as markets know the bottom half of the economy has no money so they have no impact.
Borrowing and hence growth will only happen if the upper half and possibly restricted to the top 10% take action after rates get lowered.
My bet is that people who still can do something will do nothing until the US election gets resolved. Far too much uncertainty to make an informed investment decision for anything longer then short term.
The rest of it is pure speculation as to outcome.
Powell could always surprise and do a complete 180 at Jackson Hole. going all in on another blowout stimulus. So far there is only a little shift in Fed speakers
offerings.
Risk markets seem ahead of themselves but certainly a fair amount of money is acting like a stimulus is coming right quickly.
Update: Nothing in this mornings jobs numbers which would make Powell change policy. Does not matter if numbers are true or not the numbers is what market will trade off.
Hooray – the market loves it with the Russell 2000 closing up over 1%!
Whether it’s 818 or 915 misses the point. How do federal agencies get it so wrong? Payroll data is sent to the government by every company every pay period. They have the data yet they still rely on huge adjustments well after the fact.
They need to blow up their models and start over again.
One could make an argument that unemployment is overstated. There is lots of work going on in the cash economy that is not reported to any government agency. It is all tax free. Even real estate is a gigantic money laundering operation if you know how to do it and have the means. I expect states and federal government debt to only increase once more people get off the real system and just go underground. The banking system doesn’t monitor anything below $10,000.
Illegal occupations have always been present. It seems like they are going after money laundering in real estate with new regulations.
There is a formula… home page headline is bigly positive … and fake… then a month later the real numbers are released — huge downside revisions … buried deep … so nobody sees them …
This falls into the fallacious repetition category of ‘brain washing.’ Remember the 10-ft ‘safe’ distance during Covid? Repeated, and painted on floors, and people got angry if you were six inches short.
Meanwhile: Wall Street had an early copy
https://www.nytimes.com/2024/08/21/business/economy/bls-jobs-revision-data-leak.html
Remember SAFE and EFFECTIVE hahaha
Remember who those who got fully vaxxed and were wearing n95 gasp masks … were afraid of the unvaxxed… hahahahaha
Forgive me pointing out the obvious but if job creation has been overstated then interest rates have been higher then needed to get the Job suppression Fed has engineered.
Not such a bright thing to do going into an election.
Credit card debt has also costed more then it should have. Guess who gets hurt most by this type of thing? it is not the wealthy donors but the working poor who have gotten shafted. Did they notice, these working poor that there was way too much bill left at end of month? Bet they did and they will be voting their wallets.
Witnessing the extinction of truth.
When even mild mannered government economist will blatantly lie in support of current administration where does one go for truth – forgot, there is the main stream media (see DNC propagandist).
Do all liberal Dems support the win at any cost mindset?
Forgot, greatest economy ever!
Yes bc mean tweets scary
B-b-b-b-b….Drumpf-nazi-eksusteshul-threat!!!!11!
Insurrectionist! Indictmenterer! Felonistic Felon! He must be defeated!
Hive minds proliferate with other collective behavior. Divergent thinking drops to zero.
“At this point what does it matter?”
Over 12 months, the net is about 8000 more per month if the real number is 915 K.
How come the real news isn’t the fact that they lied to us and actually admitted it? How come the real news is they aren’t lying about the data just like they did in the Soviet Union in the 1980s to pump an economy and diminish the wealth of the middle and lower class? no, I’m not into class warfare thanks. But we’ve certainly lost a lot more of our wealth down here than they have way up there.
Central bankers. I would love to freeze them in giant blocks of ice and drop them off near the Mariana trench. The world would be a lot better place.
THEY knew they were going to need a stock market pump before the election and they’re going to get it in September. More money chasing fewer products = Duhhh
Kammie just embraced FJB 2024 Econ plan. Hope whoever votes for her enjoys paying 25% tax on unrealized gains.
Does not the 25% theft apply only after $100mil?
Its starts there but unless you believe in unicorns it will quickly be lowered to 10 million, then 1 million and so on. It’s a trial balloon to see if the people will allow outright expropriation of private property.
Camel. Nose. Tent.
The people who would vote for her don’t have capital gains.
Kamala has pledged to fix this on day one.
Price controls of joy
Bread lines of joy
The unemployment of joy
Joy through abortions.
Yes by hiring 900K new government employees of course.
As usual Mish, you nailed it and have been saying it all along that these BLS numbers are more BS than not. I have been agitating about this for over a decade, they just can’t seem to give us good numbers and the markets react on faulty data.
The REAL number is probably more like -2 million
But that would have caused serious mayhem so they decided to cool it down a bit