Payrolls overestimated by 30%

U.S. #jobs data showed payrolls were revised lower by 818,000 for the 12 months through March 2024. There were downward revisions in most categories - but not all. So, where were the upside additions? There were five categories where payrolls were revised higher. Where were more jobs added? - Private education and health services added 87,000 more jobs than previously reported. - Transportation and warehousing added 56,400 more jobs than previously reported. - Other services added 21,000 more jobs than previously reported. - Utilities added 1,700 more jobs than previously reported. - Government added 1,000 more jobs than previously reported. What do you think of the revised payroll data? #Career #OpenToWork #Economy

Unrealized capital gains and labor market data

Dog Days of August: Payrolls Revisions and Fed minutes ?? The March 2024 Preliminary CES Benchmark revision is an annual exercise that benchmarks the monthly employment from the BLS’s Establishment Survey over the year in March against data from state unemployment insurance tax records. It serves a preliminary estimate of the comprehensive benchmark revision of the Establishment Survey in February of the following year. Between April 2023 and March 2024, the BLS estimated in this preliminary benchmark that cumulative payrolls growth had been 818k persons less than initially thought. So, what could this potentially mean for recent payrolls growth trends? To get a feel of this one can apply the monthly average mismatch in job growth of about -68k persons and apply it to the official payrolls. The chart ?? shows that these implied revisions for payrolls growth meant that relative to the official numbers, smoothed job growth trends slowed notably in H2 2023, from a 275k-300k range in March 2023 to around 145k in December 2023. Since then, however, trends in implied revised payrolls show a recovery and stabilization in 2024 at around 170k rather than a slowing trend since December as seen in the official data. These implied trends in payrolls growth for 2024 based on today’s preliminary benchmark estimate suggest one can be quite hopeful that we have recently seen a labor market cooling rather than a labor market deterioration. ?? Relative to the July FOMC post-meeting statement and press conference (https://lnkd.in/gX7VetQe), today’s release of the minutes of the July FOMC meeting did not contain any news. It broadly confirmed a shift from an almost singular focus on inflation towards a focus on both inflation and employment. The minutes made clear that most FOMC members were happy with progress on inflation and that, if upheld in next week’s July Personal Income & Outlays report, last week’s CPI and PPI data (https://lnkd.in/g8RhC3gG) have sealed the deal on a September rate cut. The overall conclusion should be that the minutes and recent inflation data confirmed that the September FOMC meeting will be start of a rate easing cycle. However, given the tension between still elevated longer term trends in inflation, solid real activity data and cooling labor market trends, for the Fed the main focus of the rate easing cycle will be on dialing back restrictiveness rather than a quick return to neutral. If anything, last week’s data on jobless claims and retail sales as well as the earlier discussed preliminary payrolls benchmark revisions have made the case for large amounts of policy easing less urgent. Chair Powell’s address at this year’s Jackson Hole conference will therefore make the case for gradually reducing restrictiveness, as he did after the July FOMC meeting. For more details go to Macro Market Notes: https://lnkd.in/g5Q-uHAj #labormarket #federalreserve #economy

Rightly or wrongly, it is rare for data revisions to make headlines. Today is an exception. As expected, the Bureau of Labor Statistics (BLS) preliminary annual benchmark revision tilted to the downside. Benchmarking is how the BLS goes from survey responses on a subset of the population to national level data. Today’s benchmark revisions tell us the following: 1. Total nonfarm payroll will likely be revised meaningfully lower when final benchmark revisions are published in February 2025. Typically, benchmark revisions on total nonfarm payroll range from -0.1% to 0.1% whereas March 2024’s is 0.5%. However, preliminary benchmark revisions do not account for seasonal adjustment revisions which have been much more substantial than benchmarking revisions over the last few years. We know the level of employment is likely lower than previously indicated, but it is not clear whether trends have changed (e.g., did the change in payroll employment stabilize last summer – just at a lower level than initially estimated – and then decelerate going into this summer?). This will not be clear until full annual revisions with seasonal adjustment are published. 2. Payroll employment changes were likely much more skewed than initially estimated. Over the past year, the bulk of employment gains came from Education and Health Services, Government, and Leisure and Hospitality. Based on benchmark revisions, employment gains are not likely to be revised much in these sectors (hence the average change in employment has still been respectable, near its 2010-2019 average level), however for the rest of the economy, employment gains were much more muted. For Professional and Business Services, employment seems to have contracted over February 2023 to March 2024 based on a naive allocation of benchmark revisions to actual changes. Data revisions are a common practice, and the pandemic has made data collection more difficult and affected nonresponse rates to some important surveys (as I discuss for JOLTS here: https://lnkd.in/gVEjVFhz). At times, revisions have trended upward. At times, revisions have trended downward. However, as our broader climate has become more polarized, so too has the interpretation of data releases and revisions. Increasingly, I have seen misinterpretation and misinformation being communicated around data revisions and the BLS. To that end, I strongly encouraged those interested in delve further into the technical notes provided by BLS as well as posts from my peers here on LinkedIn. #jobsreport #linkedin

BREAKING NEWS: There's been a big drop in the latest US job figures. The Bureau of Labor Statistics (BLS) has cut its estimate by 818,000 jobs for the year to March 2024. So will there be a interest rate cut in September? Look at what the futures market is pricing, in this data visualisation. They first thought 2.9 million jobs had been gained. Now that has been reduced by 818,000 jobs This large change could really shift expectations about when and by how much the US Federal Reserve might cut interest rates in September. According to CME FedWatch, there's now a 30.5% chance of a big rate cut (0.5%) at the 18th September Federal Reserve meeting. A smaller cut (0.25%) meanwhile, holds a 69.5% chance. The unexpected weakness in the job market might push the Fed to act quickly to support the economy. This revision, the largest in 15 years, suggests the job market is cooling faster than anyone thought. This could be risky for the economy if the Fed doesn't step in. The Fed's in a tricky spot – prices are still rising more that they should at 2.9% year-on-year (Core CPI at 3.2%), and now jobs are becoming a worry too.?Any thoughts? Music: So Sick of Love (Instrumental Version) by Mindme, Epidemic Sounds #InterestRates #Jobs #LaborMarket #Economics #Macro

Payroll jobs lower than previous estimates. The preliminary estimate of payroll jobs for March 2024 has been revised downward by more than 800,000 in the annual preliminary benchmark revision. The 0.5% downward revision is historically large, with the average adjustment in the +/- 0.1% range. The preliminary benchmark revision is a normal part of the Bureau of Labor Statistics' procedure for measuring jobs in the economy. This preliminary number is a preview of complete benchmark revisions that will be released in February. The revisions come from a survey conducted four times a year of all U.S. companies that take part in the unemployment benefits system and has more complete data than is available in initial monthly estimates. To my knowledge, the BLS has not commented on the source of the large adjustment, but observers have speculated that this stems in part from the the exclusion of unauthorized immigrants from the methodology used in initial monthly estimates. The number of legal and undocumented immigrants has been very large over the past several years. For now, it is an adjustment just to the March 2024 number, but the benchmark adjustments released next February will extend back to Spring 2023. The biggest downward revisions were in professional and business services, where the number of jobs was revised down by about 360,000 (-2.3%), leisure and hospitality, revised own by 150,000 jobs (-0.9%), and manufacturing, revised 115,000 (-0.9%) lower. Categories seeing significant upward revisions include transportation and warehousing, and private education and health services. The benchmark revision suggests an average monthly increase in payroll jobs of about 175,000 for the Spring 2023-2024 period, down from 242,000 in the previously released estimates. The resulting pace of job creation remains relatively robust, and still much higher than the increase in the number of people reporting that they are employed. That figure from the separate household survey has shown an employment gain of only 640,000 over the past year. This data revision does not fundamentally change the story of a job market that has been resilient, where only gradually slowing job creation has underpinned ongoing strong consumer spending. It just tells us that the rate of deceleration has been a bit faster than previously known. Because the underlying story remains largely unchanged, I do not expect this to affect the Federal Open Market Committee's decision on whether, and by how much, to cut interest rates when they meet next month. But it will be interesting to see whether Fed Chair Jerome Powell cites this in his Friday speech at Jackson Hole. #BLS #benchmark #revision #federalreserve #interestrates

US job growth was probably far less robust in the year through March than previously reported, suggesting the labor market started moderating much sooner than originally thought. The number of workers on payrolls will likely be revised down by 818,000 for the 12 months through March — or around 68,000 less each month — according to preliminary revisions by the Bureau of Labor Statistics. It was the largest downward revision since 2009. Here's our Bloomberg News story: https://lnkd.in/g2qDvt5N

This sort of revision, not uncommon, is why I think markets place way too much weight on the payroll survey. I like inflation, ISM surveys and the unemployment rate.

The US Bureau of Labor Statistics annual revision to Payrolls figures released today show a -818.000 Payrolls adjustment to March 2024 Total Nonfarm Payrolls. Equivalent to half a percent of the total US labor force, it was not insignificant, with -358.000 adjustment to Professional Services being the bulk of the revision. The BLS does not allocate the adjustment by month until the Final Revision in February 2025, so there is not much to glean from the revision. We could of course speculate that the bulk of the adjustments have come in recent months. Civilian Employment growth in the US fell from 2.0% in April 2023 to 0.4% y-o-y in March 2024. Payrolls growth was reported falling from 2.0% in April 2023 to 1.6% in March 2024. You get the picture. We still maintain our July Payrolls forecast of 112.000 added, and we see growth slowing to 53.000 added Payrolls per month a year out in time, just as we did before the annual revision release. Economic growth in the US relies not so much on the slowdown in employment as it does on the increase in real wages. If that assumption goes, the recession is not far behind. #usa #payrolls #revisions #election2024 #recessionrisk #fed

An Abysmal BLS Jobs Market Data Revision and What it Means for Procurement Per ZeroHedge, the latest BLS jobs data (hot of the press this morning) points to an incredibly weak jobs market in the US, with the revision of non-farm payrolls down over 800K jobs versus what was initially reported in recent periods. "This is the biggest negative revision to payrolls since the global financial crisis." My POV for procurement: - You're not alone if your job search is taking longer (especially CPO roles) - As people leave (and jobs are not back-filled), knowledge gaps are forming - Tech (which is growing) is eating into hiring Other takeaways? Chime in!