Jobs: Massive Revisions and Household Survey Tell the Real Story

The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the headline number, 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 275k jobs. While this did beat expectations, there are three important caveats. First, January was revised down from 353k jobs to 229k, a drop of more than 35%. Second, the Household Survey actually reported a loss of -184k. This is 3 months in a row where the Household Survey has come in well under the Headline Report. Third, the unemployment rate jumped while labor force participation remained unchanged which only further discredits the headline number.

Figure: 1 Primary Report vs Household Survey – Monthly

On an annual basis, the Household survey has been moving further from the BLS Report. This has been a consistent trend since 2018 with 2024 showing a dramatic deviation.

Figure: 2 Primary Report vs Household Survey – Annual

The BLS also publishes the data behind their Birth/Death assumptions (formation of new business). In February, the BLS assumed that 151k jobs were created by new businesses being started.

Figure: 3 Primary Unadjusted Report With Birth Death Assumptions – Monthly

Digging Into the Report

The 275k jobs surprised to the upside but may have still been considered a miss by the market given the massive revision in January. Additionally, the unemployment rate has hit the highest level in at least 2 years.

Figure: 4 Change by sector

The number of multiple job holders dropped this month, but the trend is still up.

Figure: 5 Multiple Full-Time Employees

Jobs by Category

A number of categories saw some large gains, with Manufacturing showing the lone decline.

Figure: 6 Current vs TTM

The table below shows a detailed breakdown of the numbers.

Figure: 7 Labor Market Detail

Revisions

Over the last three months, the data has been revised down by an average of 22.3k per month.

Figure: 8 Revisions

Historical Perspective

The chart below shows data going back to 1955.

Figure: 9 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% which means the jump in the unemployment rate cannot be explained by people joining the labor market. This further discredits the Headline Report.

Figure: 10 Labor Market Distribution

Data Source: https://fred.stlouisfed.org/series/PAYEMS and also series CIVPART

Data Updated: Monthly on first Friday of the month

Last Updated: Feb 2024

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