Previous U.S. jobs reports have come under scrutiny, revealing a significant issue. The government quietly adjusted the numbers, showing the elimination of 439,000 jobs through November 2023, as per the Bureau of Labor Statistics.
This adjustment implies that the initial jobs figures were overstated by 439,000 positions, indicating that the job market may not be as robust as initially portrayed. With these revised numbers, the total percentage of jobs created by the government in the past year is even higher than initially reported, fueled by increased government hiring.
The accuracy of U.S. jobs reports is crucial, impacting financial markets, U.S. Treasury yields, and influencing the Federal Reserve’s decisions on interest rate adjustments. These factors, in turn, have substantial consequences for U.S. consumers’ financial well-being.
David Rosenberg, founder of Rosenberg Research Associates, highlighted the need to reconsider reliance on payroll data in light of these revisions. According to his calculations, the downward revisions amounted to an “epic 443,000,” with over 40% of payroll growth in 2023 attributed to the BLS’s ‘Birth-Death’ model, which he characterized as a “fairy tale” used to estimate job reports.
Examining December 2023, the government sector continued to play a significant role in job creation, adding 52,000 jobs. The three-month average for government job creation reached 50,000 per month, prompting questions about the sustainability of this trend.
However, challenges extend beyond government jobs, as the health care and social assistance sector, heavily reliant on government spending, created about 59,000 jobs in the same period.
This issue of overstated job numbers is not novel, with previous revisions in August 2023 indicating a net overstatement of U.S. job growth by 306,000 jobs for the 12 months through March 2023. This adjustment lowered private sector job creation by 358,000 while increasing government payrolls by 52,000.
The concerns are not isolated incidents, as the Philadelphia Federal Reserve Bank, in December 2022, suggested an overreporting of job growth by 1.1 million in the second quarter of that year.
Even statements from political figures have faced scrutiny, as President Biden’s claims of creating 13 million to 14 million jobs have been questioned. Economists and analysts argue that these figures include jobs recovered post-pandemic shutdowns, painting a less impressive picture when considering the net job creation.
A notable sector affected is manufacturing, with a mere 6,000 jobs created in December 2023. The manufacturing sector’s contraction for 14 consecutive months is a concerning trend as it has a ripple effect across various industries.
Moreover, the U.S. labor force participation is at a historically low 62.5%, as reported by Edward Lawrence. The December jobs report revealed 683,000 workers dropping out of the labor force, and a record 8.69 million people holding multiple jobs to cope with a cumulative 17.4% inflation rate under the current administration.
These indicators point towards a challenging economic landscape, underscoring the need for a comprehensive examination of job data and its implications for the overall health of the U.S. economy.
Article: Real News Now
