{"id":130412,"date":"2025-09-09T04:54:08","date_gmt":"2025-09-09T04:54:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/130412\/"},"modified":"2025-09-09T04:54:08","modified_gmt":"2025-09-09T04:54:08","slug":"get-ready-for-more-employment-data-revisions","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/130412\/","title":{"rendered":"Get ready for more employment data revisions"},"content":{"rendered":"

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\n Large downward revisions<\/a> to monthly jobs data in recent weeks put a gigantic spotlight on an incredibly typical procedure<\/a> for economic data.\n <\/p>\n

\n They also spurred something highly atypical, with President Donald Trump firing the Bureau of Labor Statistics commissioner<\/a> over baseless allegations that the data was \u201crigged.\u201d\n <\/p>\n

\n Now, there\u2019s an even bigger revision coming: One that could imply there were somewhere between 475,000 and 900,000 fewer jobs added between April 2024 and through March 2025.\n <\/p>\n

\n Some potential factors driving the expected downward revision include weaker-than-inferred job creation at new firms; sampling errors from declining response rates; and, to some extent, adjusting for undocumented workers.\n <\/p>\n

\n On Tuesday, the BLS will provide preliminary data for its annual effort of gaining a near-complete employment count by squaring past jobs data from business surveys (more timely but not as accurate) with comprehensive unemployment insurance quarterly tax filings (highly accurate but significantly lagged in timing).\n <\/p>\n

\n Tuesday\u2019s release marks the first step in an annual review called benchmarking, a previously innocuous process that\u2019s been applied<\/a> to BLS jobs data in some shape or form for 90 years<\/a>.\n <\/p>\n

\n \u201cIt is not a bug, it\u2019s a feature; it makes the [Current Employment Statistics] more accurate,\u201d said Erica Groshen, a former BLS commissioner who now serves as senior economics adviser at the Cornell University School of Industrial and Labor Relations. \u201cAnd that happens every year.\u201d\n <\/p>\n

\n But in an age when economic data is frequently weaponized and now more recently has been itself put in the crosshairs, this BLS standard procedure feels anything but standard.\n <\/p>\n

\n This time last year, the preliminary estimate inferred that there were likely 818,000 fewer jobs<\/a> added in the 12-month period through March 2024. The initial not seasonally adjusted estimate \u2014 if it held firm come February when the final benchmark revision was released \u2014 would have been one of the largest in recent history.\n <\/p>\n

\n After the preliminary data was released, then-candidate Trump told a fabricated story<\/a> about how the government had been planning to announce this downward revision \u201cafter November 5th,\u201d Election Day, but was forced to do so before the election because of \u201ca whistleblower\u201d\u2014 \u201ca patriot leaker.\u201d He later claimed the job gains under former President Joe Biden\u2019s administration were \u201ca fraud.\u201d\n <\/p>\n

\n (There was no whistleblower. The Bureau of Labor Statistics regularly releases<\/a> the preliminary benchmark data this time of year, and it had disclosed<\/a> the precise date of this particular data release \u2014 August 21 \u2014 weeks in advance.)\n <\/p>\n

\n The final annual benchmarked<\/a> seasonally adjusted data for the 12 months ending in March 2024 was a negative 589,000, or 0.4% of overall employment (-598,000 not adjusted for seasonality), which was the largest downward revision since March 2009\u2019s negative revision of 902,000 and just above the negative 514,000 revision in March 2020 (for the year ended March 2019) that occurred during Trump\u2019s first term.\n <\/p>\n

\n These large swings happen in significant economic transitions (the Great Recession then and the pandemic now). In addition to pandemic-era economic shifts that knocked tried-and-true models out of whack, the recent surge in immigration likely played a role, economists have said.\n <\/p>\n

\n While last year\u2019s revision was larger than expected, it basically knocked down average monthly job gains by about 50,000 per month. Despite that, the labor market was still running strong during that April 2023-March 2024 period, economists told CNN last year.\n <\/p>\n

\n If Tuesday\u2019s revision is on the high end of the estimate, at 900,000 jobs, that would break down to a downward revision of 75,000 jobs per month.\n <\/p>\n

\n While Tuesday\u2019s data won\u2019t shift the current labor market outlook, a large revision could carry deeper implications, Stephanie Roth, chief economist at Wolfe Research, told CNN.\n <\/p>\n

\n \u201cThis just adds to the narrative of concerns around the labor market and questions about the reliability of the data. To the extent this data does feed into that narrative, we\u2019re worried about the reaction and headlines associated with it.\u201d\n <\/p>\n

\n Federal data is fluid and frequently subject to change as more detailed and accurate information becomes readily available. The BLS\u2019 monthly jobs report is meant to provide a higher-frequency look at employment trends, but that timeliness comes with a cost to accuracy.\n <\/p>\n

\n To get the monthly payroll estimates, the BLS surveys about 120,000 US employers, accounting for 600,000 work sites (roughly one-third of employment) and is based upon survey responses from employers across a wide swath of industries. Those respondents are given three opportunities to report their payroll gains and losses for any given month.\n <\/p>\n

\n That\u2019s why the initial payroll estimates (drawn from a survey when roughly 60% have responded) are revised twice further (when north of 90% have).\n <\/p>\n

\n Every year, the BLS conducts a revision to the data from its monthly survey of businesses\u2019 payrolls, then benchmarks<\/a> the March employment level to those measured by the Quarterly Census of Employment and Wages program.\n <\/p>\n

\n The QCEW provides a more comprehensive read on the number of businesses, employees and wages at the state, regional and county level because it derives that data from quarterly tax reports submitted by businesses to their states. Given that process, the QCEW comes with a significant lag: The data for the first quarter of this year also will be released Tuesday.\n <\/p>\n

\n Tuesday\u2019s preliminary benchmark revision won\u2019t change the existing monthly employment data for now, but they can provide a sense as to how the labor market was faring last year and heading into this year.\n <\/p>\n

\n \u201cYet, with the benchmark revision likely to show a weaker pace of job growth through March, a loss of momentum at the beginning of the year would cast a shadow on the true strength of payroll growth since then,\u201d Wells Fargo economists wrote in a note last week about the benchmark revision. \u201cIn short, even as the labor market is still standing, its footing is becoming more tenuous.\u201d\n <\/p>\n

Probable causes of a shifting job landscape<\/p>\n

\n The expected downward revision for this 12-month period likely stems from three primary factors, economists say:\n <\/p>\n

\n First, a \u201chefty chunk\u201d \u2014 perhaps half \u2014 is likely attributable to the BLS modeling of business creation (called the birth-death model) overestimating the jobs added at new businesses, Pantheon Macroeconomics economists wrote in a recent note.\n <\/p>\n

\n Groshen, the former BLS commissioner, told CNN that this potential factor is a hangover from the pandemic era.\n <\/p>\n

\n \u201cWe have had a spurt in business formations since the end of the pandemic,\u201d she said. \u201cIf this unusual spurt in business formations is populated not by the same kinds of firms that were being created before, but by firms that are in some ways more marginal, smaller, more likely to die after formation, then the birth-death model might be overestimating the jobs created by the number of formations.\u201d\n <\/p>\n

\n Low survey response rates also could be making for more challenging estimations of the monthly data, Wells Fargo economists wrote last week.\n <\/p>\n

\n \u201cThe establishment survey\u2019s overall response rate averaged 43% in the 12 months through March 2025, down from 59% in 2019,\u201d they wrote. \u201cThe falling response rate leaves greater room for firms who are responding to be systematically different from the non-respondents.\u201d\n <\/p>\n

\n And the third primary factor is likely tied to asylum-seekers and undocumented workers. The QCEW data is drawn from tax filings for unemployment insurance, and those likely exclude undocumented workers who are not eligible for benefits.\n <\/p>\n

\n \u201cAnd so, when we benchmark those people are going to disappear,\u201d Ron Hetrick, a former BLS employee and analyst who now is the labor economist at Lightcast, told CNN.\n <\/p>\n

\n However, given the slowing of immigration that started in the middle of last year and accelerated this year, the revision might better truly reflect the labor market, he added.\n <\/p>\n

\n \u201cLast year, I didn\u2019t like it because I felt that we were downward revising a number that probably wasn\u2019t a true reflection of how many people were working, because, whether you like it or not, they\u2019re on payrolls, I want to know how many people are working,\u201d Hetrick said. \u201cIt\u2019s probably going to get more accurate, because now we know these people probably are off of payrolls, so we probably know these numbers are a little too high.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"Facebook Tweet Email Link Large downward revisions to monthly jobs data in recent weeks put a gigantic spotlight…\n","protected":false},"author":2,"featured_media":130413,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[45,49,48,124],"class_list":{"0":"post-130412","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jobs","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-jobs"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/130412","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=130412"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/130412\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/130413"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=130412"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=130412"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=130412"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}