Big downward revisions to employment numbers may be exaggerated due to immigration surge
The U.S. labor market may not be as weak as a big downward revision to the Labor Department’s employment report this week would suggest.
On Wednesday, the Bureau of Labor Statistics released its monthly employment report. Employment growth was overestimated by approximately 818,000 For the 12 months to March, the figure was near the high end of economists’ forecasts and the biggest revision since 2009, when the economy was reeling from the financial crisis.
Taken at face value, the revised version is Employers added 174,000 jobs in the month The number of cases during that 12-month period was down from a previous estimate of 242,000.
The size of the correction was in line with Wall Street expectations and wasn’t a major event for financial markets, but it came as a surprise to politicians and many ordinary Americans. Gina RaymondAs Secretary of Commerce, he initially dismissed the proposed changes as a misrepresentation by Donald Trump, a display of astonishing ignorance given that the changes had been widely reported both before and after they were announced.
Many Republicans believe that this amendment Evidence of a conspiracy to falsify accounts The monthly employment report saw a revision of the numbers. That’s understandable. The scale of the revision is incredible. How can an error of this magnitude in something as important as employment statistics be an innocent error? In some ways, it’s more reassuring that the numbers were falsified than that they were simply inaccurate. Fraud on this scale requires competence, but the sheer imprecision raises the question of whether government statistics can be trusted in the first place.
The best evidence against the revision conspiracy theory is that the new figures, still provisional, were released by the very same organization.Bureau of Labor StatisticsIt would be a very strange and clumsy conspiracy to falsify the books for a year and a half and then finally release the real numbers in the middle of the Democratic National Convention.
The timing of the correction is so bad for Democrats that it is understandable that Secretary Raimondo must have been a Republican troll. The report suggests: Labor market weakness is more severe and begins much earlier More than previously thought. As Breitbart Business Digest points out, not only does the revision wipe out all of the manufacturing gains, it also shows that manufacturing jobs were lost during the period the Biden-Harris Administration was touting a manufacturing boom.
The large number of illegal immigrant workers partly explains the reason for the amendment
Moreover, the revision likely exaggerates weakness in the labor market. The data on which the revision is based come primarily from the Quarterly Survey of Employment and Wages (QCEW), which is based on state unemployment insurance records and is typically more accurate than business survey data included in monthly reports. But it also has weaknesses. Illegal immigrants, who are not eligible for unemployment benefits, are largely excluded..
Historically, this hasn’t been much of a problem: past benchmark revisions based on the QCEW didn’t take into account illegal immigrants, but their numbers didn’t fluctuate much, so they didn’t affect employment statistics. A sharp increase in illegal border crossingsBut the Biden administration’s release of millions of immigrants into the U.S. has led to a massive influx of undocumented workers. Employers likely aren’t paying unemployment benefits to many of these workers, especially those who are getting paid “under the covers,” as the saying goes.
This means that many of the jobs that previously seemed like fantasy are probably real — they’re just filled by people who don’t have authorization to work in the United States. They are probably being held by illegal immigrants. Goldman Sachs economists who analyzed the issue estimated that the changes could have mistakenly removed 400,000 to 600,000 workers from their paychecks.
Jim Bianco of Bianco Research agrees.
I disagree with the reposting of the following…
A downward revision in employment numbers is supposed to mean fewer jobs being created. But now it might mean firing “W2 employees” and hiring “backstage” employees. That is, the jobs still exist, they’re just filled by someone “off the books”… https://t.co/JM5MCdlWRL
— Jim Bianco (@biancoresearch) August 21, 2024
This notion is supported by a look at which parts of the economy are most affected by the downward revisions. Hospitality and LeisureThe United States, the main source of employment for undocumented workers, lost 150,000 jobs. Retail job gains fell by 129,000. Manufacturing job gains fell by 115,000. Goldman analysts said this was “consistent” with the idea that the exclusion of illegal immigrants had exaggerated the size of the revision.
Goldman Sachs said the real downgrade was That’s roughly half the figure released Wednesday.Between 300,000 and 400,000.
clearly, This is something Kamala Harris and Gina Raimondo probably don’t want to point out.“No! The job market is much stronger than it looks, especially when you take into account the illegal immigrants we allow into the country” is an argument that probably wouldn’t win many votes in America’s heartland.
But Republicans might want to take note. The Biden-Harris economy’s jobs record isn’t benefiting Americans as much as it seems A huge number of jobs go to immigrants who cross the border illegally.
