Jobs: Household Survey Finishes the Year 75% Below the Headline Report
The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the Headline Report, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.
Current Trends
The BLS reported a gain of 256k jobs which was well above expectations. The bigger surprise was the strong number that came from the Household Survey: 478k new jobs.
Figure: 1 Primary Report vs Household Survey – Monthly
Despite the massive beat from the Household Survey, it doesn’t change the trend for this year which has been a massive underperformance in the Household Survey compared to the Headline Report. For the year, the Household Survey was less than 25% of the total Headline Report number. For context, the Headline Report showed 2.23M new jobs for the year where the Household Survey showed 537k. That is a massive divergence and should call into question nearly every job report for the year.
Figure: 2 Primary Report vs Household Survey – Annual
The BLS also publishes the data behind their Birth/Death assumptions (formation of new business). In December, this was not a driver similar to November.
Figure: 3 Primary Unadjusted Report With Birth Death Assumptions – Monthly
Despite very low assumptions for November and December, the birth-death assumptions were responsible for 55% of the total jobs for 2024. This is the highest number going back at least 10 years.
Figure: 4 Primary Unadjusted Report With Birth Death Assumptions – Monthly
Digging Into the Report
The 256k jobs number was accompanied by a drop in unemployment rate to 4.1%.
Figure: 5 Change by sector
Jobs by Category
When looking over the last 12-month trend, the latest report shows only manufacturing as underperforming in any meaningful way.
Figure: 6 Current vs TTM
The table below shows a detailed breakdown of the numbers.
Figure: 7 Labor Market Detail
Revisions
The chart below shows how the jobs data had a lot of revisions earlier in the year but that has slowed some in recent months.
Figure: 8 Revisions
The put numbers to it, jobs have been revised up by about 5k in the last three months, but been revised down by 27k per month going back a year.
Figure: 9 Revisions
More Detail in the Household Survey
Another level of detail in the Household report shows full-time vs part-time job holders. In December, both full-time and part-time job holders added jobs, reversing the losses in November.
Figure: 10 Full Time vs Part Time
Historical Perspective
The chart below shows data going back to 1955.
Figure: 11 Historical Labor Market
The labor force participation rate is still well below the highs before the Global Financial Crisis. This month it stayed steady at 62.5%.
Figure: 12 Labor Market Distribution
Conclusion
While this was a strong jobs report with outperformance coming from the Household Survey, it does not change the general trend for 2024. The trend has been clear all year… moderate strength in the Headline Report with consistent downward revisions in future months combined with major underperformance in the Household Survey. Trump is not inheriting a strong economy.
