“The Biden Administration has basically turned the US labor market into a Temp Agency for foreign workers. American workers are not getting jobs… They’re losing them.”
E.J. Antoni, Ph.D, Heritage Foundation
On Friday, June 7, the much-awaited jobs numbers were released and as usual, they can roil the markets for a few days. Also, select politicians may use the occasion for their own purposes.
From the vantage point of markets, the belief is that “unemployment” numbers, if soft enough, will prompt the FED to relent and start the long-awaited “easing”, while if they are strong, it means such a move will be delayed further. This obsession with “unemployment” and “easing” really does not do justice to the issue of whether the FED is easing or not. See our recent article, “Are We Back To the Everything Bubble.”
Yahoo Finance showed typical coverage: “The US labor market added more jobs than expected in May, defying previous signs of a slowdown in the economy. Data from the Bureau of Labor Statistics released Friday showed the labor market added 272,000 nonfarm payroll jobs in May, significantly more additions than the 180,000 expected by economists.”
A lot of jobs were created. Great for Biden!
While more jobs were created, the unemployment rose to 4%. Huh? Usually, that is caused by a shift in labor participation.
We begin this journey noting the difference between “The Establishment Survey” and the “Household Survey”. The Establishment survey is conducted by the BLS (Bureau of Labor Statistics) while the Household survey is conducted by the Census Bureau. One is basically business reporting on the number of jobs and the other is household reporting. Recently, there has been a notable divergence between the job numbers reported by the two surveys. The difference is large, over 4 million jobs. In part, this may be because the Household survey counts people, not jobs, and thus does not count the same as the Establishment survey does a person who holds multiple jobs.
chart
Sometimes one survey shows gains and the other shows losses. But as noted, The Household survey has recently shown substantially fewer jobs created than the Establishment survey. the Establishment survey is the one used most often by the media.
Besides these differences, critics point out other things about such numbers. First, they are subject to revisions and those future revisions are almost always downward. Secondly, it becomes a discretionary choice of which numbers to emphasize. This allows those with a political agenda to make a selective case, knowing full well the majority of the public will never sense the statistical sleight of hand. Just to ensure your eyes glaze over, below is some further detail.
