One reason Americans aren't very happy with the economy, despite the very positive jobs reports released every month, is that those reports are wrong.
The Department of Labor estimates nonfarm employment each month and releases it in the Employment Status Report, usually on the first Friday of the month.
Initial estimates are based on employer surveys conducted mid-month. Just as polls of thousands of voters can be used to predict the winner of an election, relatively small surveys are used to estimate the national labor market.
Reports are often revised up or down as the government obtains more information about employment for the month.
The past year has been an unusual one due to the cumulative size of the revisions and the fact that they have almost always been moving in one direction.
The number of employees has been revised downward for four consecutive months through December. In fact, it has been revised downward 10 times in the past 11 months.
Joe LaBonna, a former Trump administration economist who is now chief economist at SMBC Nikko Securities, calculated that this resulted in up to 443,000 fewer jobs in total than originally reported.
This is the largest 11-month total since 2022, Lavorgna said.
The government may still revise its estimates for November and December, so the final tally could be even higher. Indeed, December payrolls were significantly higher than analysts expected and are widely expected to be revised downward.
Government estimates of the state of U.S. employment post-pandemic have been hampered by declining response rates from companies to Labor Department surveys. To continue the analogy, it's similar to the challenge political pollsters face when people keep refusing to answer poll questions. The data becomes less reliable and more work needs to be done by the econometric model. Basically, fewer answers means more guessing.
Employment statistics are consistently overestimated, and there is a risk that the reliability of the Ministry of Labor's employment reports may be undermined. Some on the right are already beginning to suspect that the numbers are being manipulated to curry favor with the Biden economy.
“Is it all spec? Incredible that almost every subsequent revision is revised downwards That suggests so,” wrote Matt Palumbo. recently On the Dan Bongino Show website.
Joe Biden has frequently claimed, without evidence, that his chief rival for the White House, former President Donald Trump, is a threat to our democracy, a move that could shake some in the government. They have used some apocalyptic rhetoric to fudge numbers and policies to hinder Trump's electoral chances. .
