The Bureau of Labor Statistics said this week that government estimates of employment growth over the last year are likely to be drastically lowered.
According to a preliminary assessment by the department, 818,000 will cause an overall employment increase through March of this year to be adjusted down. That is a bigger adjustment than usual; 0.5% of all jobs are involved.
The establishment survey indicates that overall employment growth during that time was 2.9 million, so almost a third of job gains are expected to be deleted. For Democratic presidential contender Kamala Harris and President Joe Biden, who have highlighted the employment increases of recent years, the lower numbers are a disadvantage.
Still, employment growth by historical standards has been robust even with the changes. For the year ending in March, pre-revisions show the economy adding 242,000 jobs a month. Using the changes, the count would be 174,000. That is probably sufficient to keep the unemployment rate moving lower.
“This early estimate does not change the reality that the employment recovery has been and is historically robust, providing substantial job and income growth, strong consumer spending, and record small company development,” said Biden’s Council of Economic Advisers head, Jared Bernstein.
Reacting to the revelation, former President Donald Trump said that millions of jobs will go should Harris lose the presidential contest as the Biden government had been “found fraudulistically manipulating” employment figures.
Still, the agency’s regular process for changing its employment growth projections calls for these adjustments. These are only drafts; the final changes will be done using the January 2025 jobs report.
Based on a monthly poll of businesses, the BLS re-benchmarks its payroll employment figures—based on which it counts all the jobs—a procedure that can lead to significant changes.
Covering more than 95% of occupations, that thorough count—the BLS’s Quarterly Census of Employment and pay—is a quarterly evaluation of employment and pay recorded by companies.
With slower employment increases than the establishment survey, the changes put the job growth figures more in line with the estimates from the independent household survey included in the monthly jobs report. Still, the same is true of the QCEW and the household survey may be understating fundamental growth.
One reason that would be the case is because it is less likely to record the employment of illegal immigrants. Faster population growth and more employment than reported by the BLS have come from a recent Congressional Budget Office analysis including data on the numbers of illegal immigrants crossing the border without authorization. This analysis included Department of Homeland Security data.
Although the QCEW is derived from thorough unemployment insurance data, Goldman Sachs analysts pointed out in a recent article that undocumented immigrants usually do not qualify for unemployment benefits.
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