Beneath a weak headline jobs number, the details are even weaker.
Initial Thoughts
The huge surge in employment levels in January were substantially removed in February.
23 months ago full-time employment was 134.4 million. It’s now 134.7 million, up by about 300,000. Nonfarm payrolls are reportedly up over 4 million in the same timeframe.
There was a huge increase in part-time work sending the U-6 unemployment rate to 8.0 percent up from 7.5 percent.
Total full-time work dropped by 1.22 million.
Job Report Details
- Nonfarm Payroll: +151,000 to 159,219,000 – Establishment Survey
- Civilian Non-institutional Population: +62,000 to 272,847,000
- Civilian Labor Force: -385,000 to 170,359,000 – Household Survey
- Participation Rate: -0.2 to 62.4% – Household Survey
- Employment: -588,000 to 163,307,000 – Household Survey
- Unemployment: +203,000 to 7,052,000 – Household Survey
- Baseline Unemployment Rate: +0.1 to 4.1% – Household Survey
- Not in Labor Force: +546,000 to 102,487,000 – Household Survey
- U-6 unemployment: +0.5 to 8.0% – Household Survey
Nonfarm Payrolls Change by Sector
Monthly Change in Nonfarm Payrolls
I suspect we will see some nasty negative revisions to November and December job numbers when the quarterly QCEW data is released.
Monthly Revisions
- The change in total nonfarm payroll employment for December was revised up by 16,000, from +307,000 to +323,000.
- The change for January was revised down by 18,000, from +143,000 to +125,000.
- With these revisions, employment in December and January combined is 2,000 lower than previously reported.
Part-Time Jobs
- Involuntary Part-Time Work: +483,000 to 4,937,000
- Voluntary Part-Time Work: +136,000 to 22,435,000
- Total Full-Time Work: -1,220,000 to 134,676,000
- Total Part-Time Work: +610,000 to 28,511,000
- Multiple Job Holders: +96,000 to 8,860,000
The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported. This month was wild.
Note that multiple job holders add to nonfarm payrolls but not the number of employed.
Hours and Wages
This data is frequently revised.
- Average weekly hours of all private employees was flat at 34.1 hours.
- Average weekly hours of all private service-providing employees was flat at 33.1 hours.
- Average weekly hours of manufacturers was flat at 40.1 hours.
An overall decline or rise of a tenth of an hour does not sound line much, but with employment over 160 million, it’s more significant than it appears at first glance.
Hourly Earnings
This data is also frequently revised. Here are the numbers as reported this month.
Average Hourly Earnings of All Nonfarm Workers rose $0.10 to $35.93. A year ago the average wage was $35.54. That’s a gain of4.0%.
Average hourly earnings of Production and Nonsupervisory Workers rose $0.19 to $30.89. A year ago the average wage was $29.67. That’s a gain of 4.1%.
Unemployment Rate
Reasons Why the Unemployment Rate Will Rise
- DOGE Government Firings
- Massive tariff and trade distortions
- General business slowing even before the above distortions
Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.
- The official unemployment rate is 4.1 percent.
- U-6 is much higher at 8.0 percent.
Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.
Some of those dropping out of the labor force retired because they wanted to retire. Some dropped out over Covid fears and never returned. Still others took advantage of a strong stock market and retired early.
The rest is disability fraud, forced retirement (need for Social Security income), and discouraged workers.
Birth Death Model
Starting January 2014, I dropped the Birth/Death Model charts from this report.
The birth-death model pertains to the birth and death of corporations not individuals except by implication.
For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.
Birth-Death Methodology Explained
I gave a detailed explanation of the model and why the hype is wrong in my June 8, 2024 post How Much Did the BLS Birth-Death Adjustment Pad the May Jobs Report?
I repeat, do not subtract the birth-death number from the headline number. That’s flawed.
However, it is now clear that the BLS is too optimistic about the number of jobs they believe are being created by the net creation of new businesses.
Household Survey vs. Payroll Survey
- The payroll survey (sometimes called the establishment survey) is the headline jobs number. It is based on employer reporting.
- The household survey is a phone survey conducted by the BLS. It measures employment, unemployment and other factors.
If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.
Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.
These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.
The BLS payroll reports smack of oversampling large employers and undersampling small employers where jobs have been trending lower.
Final Thoughts
Despite all the work I put into these reports, all of the BLS monthly data is total garbage.
I do the best with BLS data that I can, or anyone can.
The quarterly QCEW and Business Employment (BED)reports represent a 96 percent sample. But those reports lag by about 5 months.
The QCEW reports have been hugely negative and there is every reason to believe QCEW trends will continue.
Related Posts
January 31, 2025: The BLS Confirms US is Now Losing Jobs in Net Business Creation
The BLS BED report provides further confirmation the BLS Birth/Death jobs model is seriously screwed up.
February 4, 2025: Job Openings Drop by 556,000 in December, Quits Show Job Finding Stress
Job openings have collapsed. And the number of quits confirms people are staying put.
February 7, 2025: Huge BLS Benchmark Revisions Remove 610,000 Jobs From 2024
Every February the BLS does annual benchmark revisions for the prior year. This year there were huge revisions.
The first link above on BED is a key item.
The Birth-Death model that feeds the monthly jobs report is bogus. It has been screwed up since Covid, first underreporting jobs then overreporting them.