Current Employment Data

Current  Employment Commentary:

Current Employment ChartThe U.S. Bureau of Labor Statistics (BLS) has released its “preliminary estimates” for the current U.S. employment situation for the month of January 2018. The numbers are considered “preliminary” for two more months to adjust for late arriving data and are also adjusted  outside these guidelines once again mid-January.

The BLS Commissioner said:“Nonfarm payroll employment rose by 200,000 in January, and the unemployment rate remained at 4.1 percent. Employment continued to trend up in construction, food services and drinking places, health care, and manufacturing. In 2017, employment growth averaged 181,000 per month.”

However, if we look at the Not Seasonally Adjusted numbers we find that employment was 148,558,000 in December adjusted up from the originally released numbers of 148,346,000. January numbers came in at 145,473,000. So as they stand right now that gives us a Decrease of -3,085,000 jobs in January based on the new December/January BLS numbers here .

However, as noted above the BLS commissioner said jobs increased by 200,000. That is because he is talking about “Seasonally Adjusted” jobs. Meaning that although actual jobs are down by over 3 MIllion, they are up by 200,000 more than average for this time of year.


January Adjustments:

In recent years we had our doubts about the January adjustments, we have been tracking the data as released along with the changes since 2012. In 2013 they found 738,000 “previously overlooked” jobs, in January 2014 they found another 513,000 jobs and in January 2015 they found another 227,000 jobs. In January 2016 they backtracked and erased 75,000 jobs, and in January 2017 the difference was only about 20,000 jobs. The BLS calls this adjustment “Benchmarking”.

This year’s Commissioner’s Comment reads: “Following our usual practice, there were routine annual adjustments to the data from our two surveys. The establishment survey data released today reflect the incorporation of annual benchmark revisions. Each year, we re-anchor our sample-based survey estimates to full universe counts of employment, primarily derived from the Quarterly Census of Employment and Wages, which enumerates jobs covered by the unemployment insurance tax system. The effect of these revisions on the underlying trend in nonfarm payroll employment was minor. (Additional information about the benchmark revision and its impact is contained in our news release and on our website at”  

This years benchmarking increased the number of jobs by an average of about 135,000 from April 2016 through December 2017 which corresponds to the period of change for last year. They say they adjust the numbers only a few years back. But when we actually verify their numbers pre-adjustment and post-adjustment, the changes often go much further back than they claim.  In 2016, the BLS  “Benchmarked” their data back to 2000. Changes in 2014 went all the way back to 1979.

See BLS Changes Employment Numbers  for the details.

On the Chart below we can see how the various sets of numbers compare. The 2017, 2016 and 2015 numbers are so close that it is difficult to see them on the chart. In addition to the issue of the numbers changing there is the problem that the “Civilian Non-Institutional Population” continues to increase by roughly 200,000 people a month, although from December 2014 – January 2015 there was a massive 700,000 increase… possibly due to the changes allowing illegal aliens to become legal at that time (although the BLS claims that they were just adjusting their numbers to match the Census Bureau numbers). Although supposedly they did that the previous year as well so there was still a massive increase coming from somewhere. The bottom-line though is that the number of jobs needs to increase more than the population increase for the unemployment rate to actually fall.

Current Employment Chart


The Effects of Population Increases

According to the BLS, in November 2007 there were 139,443,000 people employed, the unadjusted unemployment rate was 4.5% and the civilian non-institutional population was approximately 232 million. In January of 2018 there were 145,473,000 employed for a net increase of 6.03 million jobs with an unadjusted unemployment rate of 4.5%.

But now there are 256.780 million civilians (not in jail, the military or institutions). So the population has increased by roughly 24.78 million. So of those new people only 24% have jobs (6.03/24.78). 

Employment / Population Ratio

If you take the number of jobs and divide it by the population you get what percentage of the population is working. You would think this would be a much more accurate indicator than the unemployment rate. If we look at the current Employment Population Ratio chart you will see that it fell drastically beginning in 2008 and has since begun climbing but it is still nowhere near previous levels. As a matter of fact it isn’t even up to the previous lows of 1992 and 2003. So the fact that the “unemployment rate is the same” is a bit misleading since a much smaller percentage of the population is actually working. Bureau of Labor Statistics Series LNS12300000.Employment Population Ratio Chart


According to Shadowstats the government is really underestimating unemployment by even more than our numbers suggest since “long-term discouraged workers were defined out of official existence in 1994.” The new U-6 numbers only include short-term discouraged workers, long term discouraged workers are removed from the Labor Force and not counted.

The ShadowStats Alternate Unemployment Rate

Plus according to  David Stockman a two-term Congressman from Michigan and Director of the Office of Management and Budget under President Ronald Reagan:

“In fact, at the February 2008 peak prior to the crisis, the BLS reported 138.5 million nonfarm payroll jobs compared to 143.9 million in April 2016. The net gain is thus only 5.6 million, and it means nearly 9 million or 61% of the 14 million new jobs our President has been crowing about are not “new” at all; they were born-again jobs, and even then they consist of lower paying and lesser quality jobs than the ones obliterated during the crash and so-called Great Recession.

For instance, there has been a loss of 2.3 million goods-producing jobs in manufacturing, mining/energy and construction, paying an average of$58,000 per year; and these have been swapped for 1.9 million jobs in leisure and hospitality paying less than $20,000 per year.”

Historical Background:

Employment peaked in November 2007 at around 139 million and then fell to 136 million bounced above 138 million before falling below 128 million in January 2010. By December 2012 the number of people employed reached between 135 and 136 million depending on which BLS numbers you believe. A year later, December 2013, the BLS was saying the employment was above 138 million and by December 2014 the official numbers had topped 141 million.

From the chart, we can see that employment in November 2013 was nearing levels reached in November 2007 when employment peaked at just over 139 million jobs. But then it fell sharply as it seems to do every January (which is why they “seasonally adjust the numbers” to make annual comparison easier). Once again we need to note that the total U.S. population (not just the “civilian non-institutional population) has increased from about 305 million to about 323.5 million since 2007.

BLS Changes Employment Numbers


In January 2018 an average of 135,000 jobs were added although December 2017 jobs increased by 212,000.

In January 2017 112,000 jobs were added to December 2016.

In January 2016 the “non-adjusted” numbers underwent their annual massage (i.e. adjustment) and this time rather than creating phantom jobs they actually removed 75,000 phantom jobs.

But in January 2015 the “non-adjusted” numbers were adjusted and the BLS found roughly 227,000 jobs.

In January 2014 they found roughly 513,000 jobs. And even though they say they only go back three months with their regular adjustment, their annual adjustment can go back years. This time they went back and created more jobs out of thin air going all the way back to 1978. Just like with the “Ministry of Truth” in George Orwell’s Classic book “1984” it becomes increasingly difficult to determine where employment really stands and to track any trends, if the “yardstick” for measurement is constantly changing.

According to the BLS, “On an annual basis, the establishment survey incorporates a benchmark revision that re-anchors estimates to nearly complete employment counts available from unemployment insurance tax records. The benchmark helps to control for sampling and modeling errors in the estimates. For more information on the annual benchmark revision, please visit”  But that doesn’t explain why they would change data going back several years.

They said the “benchmarking” for January 2014 only went back as far as January 2009 but in actuality, they changed the numbers all the way back to April 1979 — 20 years further than they reported!

For 2015 they “only” changed the numbers as far back as April 2013 and added 227,000 jobs. But the newest change is on top of the change they made in January 2014, which added 513,000 jobs and changed the numbers all the way back to April 1979.

In 2016, the BLS  “Benchmarked” their data back to 2000. Previous revisions have resulted in roughly a 1.5 million job difference, but this revision resulted in very minor differences and even reduced the peaks in recent years minimally. These changes supposedly resulted from a new database for Services for the elderly and persons with disabilities coming on line which allowed the BLS access to more accurate numbers.

In 2013, the BLS changed the employment numbers back to July of 1991. At that time, I contacted the Bureau of Labor Statistics and they curtly pointed me to a short hidden blurb on their website that supposedly explains why they did it.  See BLS Changes Employment Numbers for our full discussion of this (pseudo) BLS explanation. Their justification was that they hadn’t properly counted all the “Property and Casualty insurers”. And somehow Property and Casualty insurers increased the total number of jobs by 104,000 in August 2010 and by 738,000 in December 2012. Boy there must have been a lot of Property and Casualty insurers hired during that couple of years of recession!

You can see the cumulative difference between the 2012 numbers and the new numbers on the above chart the total difference is now 1.478 million jobs.

Note: The Employment rate and the Unemployment rate are based on two entirely different surveys but theoretically they should be two sides of the same coin. If you look at the chart above it does look like the employment rate is climbing i.e. more people are getting jobs as the trend channel does seem to be up.

By looking at the employment rate we should be able to tell how many jobs there are in our economy, pure and simple. (As Detective Joe Friday in Dragnet would say, “Just the facts Ma’am”). Are there more jobs than last year? Good! Are there fewer jobs than last year? Not good. Simple as that! But things have gotten a bit more complex with the implementation of Obamacare. It has inadvertently created incentives for companies to switch from full time employees to part-time employees thus two people may be considered employed where there used to be only one… except there is no additional work being done… but the numbers look better.

We need to consider the population factor. If the number of jobs stays the same but the population increases drastically then the unemployment rate will rise even though the number of jobs stayed the same. So looking at the unemployment rate is also important. Unfortunately, it still doesn’t give us the full picture. If the U.S. population is growing (and it is) but the number of jobs only holds steady the number of people without jobs will increase. So in order for the real unemployment rate to stay the same the number of jobs has to increase by at least the same rate as the population. If the number of jobs increases at anything less than the rate at which the population is increasing, the unemployment rate will be increasing.

Gallup polls look at the newly renamed “Good Jobs Metric” (formerly Payroll to Population aka. P2P) and has found that the number is surprisingly level from July 2011 through April 2016 (higher is better) but has increased sharply in recent months.

Year P2P
July 2011 44.9%
July 2012 45.0%
July 2013 44.6%
July 2014 45.2%
July 2015 45.6%
July 2016 44.9%
June 2017 46.5%
July 2017 Gallup


The P2P looks only at those working over 30 hours a week. So, in other words, when taking population increases and full-time employment into consideration, no matter what the official Unemployment rate says the P2P says that the employment situation is slightly better than July 2011 (higher is better).

Instead of the P2P the U.S. Bureau of Labor Statistics uses the Labor Force Participation Rate. If we look at the BLS’ Seasonally Adjusted Labor Force Participation Rate we see that is has fallen drastically since 2009. Prior to 2009 it held fairly steady at around 66% of the workforce being employed but it is now below 63%. In January 2015, the Labor Force Participation Rate was 62.9% it slowly worked its way down to 62.5% in October 2015 and November but may have bottomed there and now has rebounded a bit back up to 62.8% in June 2017.

So why has the unemployment rate fallen so much since 2010?


Labor Force Participation RateAccording to the Bureau of Labor Statistics the “Labor Force” is made up of both employed and unemployed people.  Unemployed people are defined as those who are actively looking for work. Once you stop looking (i.e discouraged workers) you are no longer in the official labor force.

The Labor Force Participation Rate (LFPR) is the  percentage of the population that is in the Labor Force i.e.  Labor Force divided by Civilian Population equals the Labor Force Participation Rate.lfpr-formula

So if the Labor Force shrinks because people quit looking for a job the LFPR falls. And because of the way that the unemployment rate is calculated:

  • As the LFPR falls it appears that the unemployment rate is falling
  • Even though there are the same number of people who can’t find jobs (but are no longer “officially” unemployed since they stopped looking for a job).

See Labor Force Participation Rate for more information.


To determine the employment rate the U.S. government surveys 390,000 businesses nationwide every month. The raw number is what we use here and it is not  seasonally adjusted. You would think this number would be considerably more reliable than the 60,000 households that they survey to obtain the unemployment rate. And I prefer it to any seasonally adjusted numbers. This survey is submitted by the businesses monthly based on company employment on the 12th of the month but for some reason the first release is considered preliminary to allow for late arrivals and it often changes significantly in later months (when the public is no longer watching). For instance the October 2012 number originally said  134,792,000 (prior to the election) up from 133,797,000 the previous month but immediately after the election the October numbers were adjusted down -90,000  to 134,702,000. So rather than more jobs appearing due to late arrivals they somehow overestimated the number of jobs by 90,000. Typically, the variation during the 3 month adjustment period is no mare than 20,000. But somehow during this critical pre-election month they were off by 90,000.

See Current Unemployment Rate for an explanation of how the government calculates the official Unemployment rate.

Source: U.S. Bureau of Labor Statistics- Current Employment Rate Data

For more information See:


  1. Jim Thykeson says:

    What is the rate of taxes with drawn from wages that go to S/S and Medicare?

    • An employee’s portion of social security tax is 6.2% of his or her social security wages (i.e. up to the “wage base limit”). Employers are taxed an additional 6.2%, for a total contribution of 12.4%. There is no maximum income to pay into Medicare so you pay 2.9 percent of all W-2 income toward medicare.