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Job Numbers Have Been Revised Down for Every Month This Year

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I’ve been saying that the government job numbers seem wonky. Looking at the monthly revisions bears this out. Every month this year, the Bureau of Labor Statistics has revised the nonfarm payroll numbers from previous months lower.

The BLS released the August nonfarm payroll report last Friday. The government reported 187,000 jobs created in August. That was better than the 170,000 estimate. But the unemployment level unexpectedly spiked to 3.8%. That was the highest unemployment print since February 2022.

The unemployment number including discouraged workers and those working part-time for economic reasons jumped to 7.1%. That was a 0.4 percentage point increase and the highest since May 2022.

For months, politicians and pundits have pointed to a “strong” labor market to assure us that the economy is doing great despite rising interest rates. But there haven’t been nearly as many jobs created as advertised in the monthly reports. Once the breathless headlines fade away, the BLS is going back and revising these “strong” jobs reports lower.

In the latest data release, the BLS dropped the number of jobs created in July by 30,000 to 157,000. It also revised June’s estimate down by 80,000 to 105,000. That makes the June job report the weakest since December 2020. Where was that headline?

This isn’t some kind of anomaly. The BLS regularly revises reports downward. In July 2022, the BLS revised the previous three months lower, magically erasing 100,000 “new jobs” from the books.

In fact, every report this year has been subsequently revised downward.

So, why should we trust any of these numbers?

During his podcast, Peter Schiff pointed out that there is no way that this is random.

If it really was just random and that sometimes the government was too high and sometimes they were too low, maybe you’d have three downward revisions and three upward revisions. Maybe four and two. Five and one would be pushing it. But six out of six was a pretty good indication that it wasn’t random.”

And now it’s seven out of seven.

Try tossing a coin seven times and see if you can get heads all seven times. How many times are you going to have to do that before that happens? It’s not easy.”

Peter said it appears that the BLS is just biased and thinks the economy is stronger than it really is.

They just assumed jobs were created that weren’t. And then when they got more data that kind of contradicted their rosy vantage point, well, then they revised down.”

But the markets typically just react to the initial numbers. The revisions happen quietly in back alleys. Nobody pays much attention to them. That creates the illusion that the labor market is much stronger than it actually is.

The lesson here is we should be skeptical of these government numbers. Things aren’t nearly as rosy as the headlines would indicate.

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About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
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