On August 21, 2024, the U.S. Bureau of Labor Statistics (BLS) released a notice that seems to be taking Social Media by storm. In it the BLS stated that after doing their ordinary checking they found that March 2024 data overestimated the number of jobs by 818,000. This is a preliminary to the regular audit that they do every January. So, in this audit they are only checking March as a sample of what is to come.
Back in April when this data was released we published an article entitled March 2024 Employment Higher Than Expected and now we know why. Originally, they said there were 157,218,000 jobs in March up from 156,599,000 putting employment 659,000 jobs above the previous year. But if that number were actually a decrease of -818,000 rather than an increase, it would have meant that jobs were LOWER than the previous year not higher, which would probably have had more impact on markets.
If you have been a long-time subscriber you will know that this isn’t the first time that the BLS has made massive changes to their numbers after the fact. Every month the numbers are different from the originally issued numbers. Sometimes they are slightly different and sometimes they are significantly different. They continue modifying them for three months and then they go back in January and modify them once more.
Occasionally, they modify them for previous years and call it an “annual benchmark revision”. Sometimes they lie Um I mean “misstate” the extent of their changes and make changes further back than they say they have. I generally try to call them out about this on our Current Employment Rate page. Three of the worst changes (i.e. over a million jobs difference) were in June 2018, August 2012, and December 2012. In each case, they adjusted jobs upward rather than downward in this case. Although, then they adjusted the following months downward by smaller amounts over several months but the aggregate was much greater than the initial upgrade.
In June 2018 they adjusted jobs upward by 1,018,000 but then they adjusted every month from July 2018 through April 2020 down by as much as -852,000 in March 2020, but most other months were in the half million range. Interestingly, April 2020 was also adjusted down by -818,000 exactly the same as March 2024. To paraphrase the Bible “the Government giveth and the Government taketh away”. And as you would expect they took away many multiples more than they “giveth”.
You can see the full table including the original numbers, the adjusted numbers and the difference here.
The BLS table Published on August 21, 2024
Source: BLS Update
What is Worrying Social Media?
The major worry is that March was already indicating a possible recession and now it looks much worse. Social media is now wondering:
- Was the overstatement intentional to dupe the public into thinking that the Biden economy was better than it really was?
- Are we truly in a Recession?
- Will the FED lower rates more than originally anticipated?
- Was this released now to give the FED a bigger excuse to lower rates?
- Are our BLS numbers any more reliable than 3rd world countries?
The “Sahm Rule” created by Claudia Sahm, a macroeconomist who worked at the Federal Reserve, states that we are in recession when the three-month average unemployment rate moves above the lowest three-month moving average unemployment rate over the last 12 months by half a percentage point or more. So, this massive increase in unemployment in March would probably have indicated a recession and prompted the FED to cut rates earlier.
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