The Blubber

Initial US employment reports overstated by 439,000 jobs in 2023

This implies that the initial job figures were overstated by 439,000 positions, indicating a less robust job market than initially portrayed by the government.

The revised job numbers hold significance as they influence market movements, U.S. Treasury yields, and play a crucial role in the Federal Reserve's decisions on interest rate adjustments, ultimately impacting consumers' financial well-being.

David Rosenberg, founder of Rosenberg Research Associates, emphasized the need to reconsider the reliance on payroll data, pointing out that the downward revisions amounted to an extensive 443,000, representing over 40% of the reported payroll growth in 2023. He highlighted the impact of the "Birth-Death" model, a method used by the Bureau of Labor Statistics (BLS) to estimate job reports.

In December, the government sector maintained a prominent role in job creation, adding 52,000 positions, contributing to a three-month average of 50,000 government-created jobs per month. Questions about the sustainability of this trend remain unanswered by Acting Labor Secretary Julie Su.

Industries like health care and social assistance, closely tied to government spending, added around 59,000 jobs during this period.

The issue of overstated job numbers is not new, with a previous BLS revision in August 2023 revealing that U.S. job growth for the 12 months through March 2023 was overstated by a net 306,000 jobs, averaging 25,500 fewer jobs per month in that period. Private sector job creation was also adjusted lower, while government payrolls saw an increase.

Presently, the U.S. labor force participation stands at a historically low 62.5%. The December jobs report indicated that 683,000 workers exited the labor force, with a record 8.69 million individuals juggling multiple jobs for financial stability. The economy witnessed a decline of 1.5 million full-time workers since June of the previous year, coupled with an addition of 796,000 part-time workers.