A Deep Dive: Does Government Job Data Reflect Reality?

Their story isn’t isolated. I constantly hear anecdotal accounts that suggest an extremely tight labor market. I also see many articles reporting layoffs and hiring freezes.

Something is off here. The official government data indicates there are plenty of jobs, with more being created every day, but people’s experiences say not so much.

What gives? 

Could it be that the data is off?

I have always been skeptical about the Bureau of Labor Statistics data. The frequency and scope of revisions should make everyone do a double-take. However, this is the data we have. Surely, it reflects some aspect of reality.  

I’ve been thinking a lot about this dichotomy between the data and perception on the street, so I decided to take a deep dive into the May jobs report to see if I’m missing something.  

Turns out, I was. 

The Headlines

According to the headlines, the U.S. economy is cranking out jobs. If you only skimmed the story, you probably know that the economy added a lot more jobs than forecast in May. U.S. payrolls rose by 172,000. That followed a surge of 179,000 new jobs in April.  

Meanwhile, the unemployment rate remained steady at an acceptable 4.3 percent.  

If we stop there, the labor market looks really strong. One gets the impression that the economy is humming. But perhaps we should take a deeper dive. 

What Kind of Jobs Are We Creating? 

It’s important to understand exactly what kind of jobs the economy is supposedly generating. Based on the data, they seem to be concentrated in lower-paying industries.

Healthcare, government (state and local), and leisure and hospitality are the sectors adding jobs.

Meanwhile, manufacturing is weak, having shed 78,000 jobs over the last year. Financial services are also weakening, and white-collar hiring has slowed significantly. 

The weakening in the financial sector is particularly worrisome, as it is often a leading economic indicator. A decline in manufacturing is also troubling, as it often reflects reduced demand, higher financing costs, and a decline in capital investment, all of which are ominous signs for the broader economy.

Part-Time and Multiple Jobs

While there seem to be plenty of new jobs out there, a lot of them are held by the same people, as there is a growing number of people working extra jobs to make ends meet.

A dirty little secret is that BLS data doesn’t differentiate between part-time and full-time jobs. If I start delivering pizzas in the evening to make ends meet, the BLS counts that as 1 job created. Obviously, a pizza delivery job and a high-paying factory job are not the same thing and don’t reveal the same economic dynamics.

Involuntary part-time employment rose from 9 to 13 percent above the January 2023 level by mid-2024. 

Note that between November and December 2025, involuntary part-time employment surged to 136 percent of its January 2023 level as desperate people snatched up seasonal holiday jobs to pay the bills.

There is also a notable increase in the number of people working multiple jobs for economic reasons.

Again, if I get a second job because I can’t pay for groceries, the BLS records this as a “new job created” and the mainstream financial media tout it as a strong sign for the economy. However, it reflects an entirely different reality. Price inflation is strangling people, and they have to take on a second job just to keep up.

I Give Up!

There are also a lot of people who have simply given up on finding a job.

The number of people who want a job but have stopped looking surged from 5.1 million to 9.8 million during the pandemic. That moderated between 2021 and 2023, falling back to a low of 5.5 million in early 2023. However, the number has been drifting higher in recent months. In May 2026, the number of people who want a job but aren’t considered part of the labor force rose to 6.76 million, the highest level in the post-pandemic era.

The labor force participation rate reflects this decline. It has fallen to 61.8 percent. The last time we saw labor force participation this low (with the exception of the pandemic era) was 1976.

When we factor all these people into the equation, we find that the actual unemployment rate is closer to 8 percent.

It’s All in the Spin

It just goes to show that the media can spin (bad government) data however it wants. One can look at the raw job data and conclude that the economy is robust. It is creating jobs. People are working. All is well. This is the spin we hear every week on Fox Business and CNBC.

However, the available data tells a different story when you dig into the minutiae. In reality, the economy isn’t creating good jobs. People are trying to make ends meet as prices rise relentlessly. They are taking on second jobs and part-time jobs just to pay the bills. More Americans want to work but aren’t actively participating in the labor market, and many people are stuck in part-time jobs even though they want full-time work.

 And many people have simply given up on finding a good job altogether.

The Revisions 

I mentioned revisions earlier. The fact that these numbers will almost certainly change materially in the months ahead casts a shadow of doubt over the entire job narrative.

In other words, the numbers are never really the numbers. They change month after month as the analysts at the BLS fidget with their slide rules and abacuses.

Keep in mind that in January, the bureau made its end-of-the-year adjustment to the “birth-death model” it uses to determine job growth. That erased nearly half a million jobs from the economy. To be precise, the BLS wiped out 403,000 jobs with its model revision (At the same time, it revised December’s report down from 50,000 to 48,000 jobs).

In fact, downward revisions appear to be standard operating procedure for the BLS. The agency erased nearly 1 million (911,000) jobs that it initially claimed were created between March 2024 and June 2025.  

In 2023, job numbers were revised down in 10 of the 12 months.

This AI-generated chart shows revisions over the last year. It’s frightening that this data is used to make important policy decisions.

One should always take government data with a grain of salt. But if we aren’t going to reject it outright (if we do, we have nothing at all to go on), we should at least analyze it with a microscope. The headlines touted by your mainstream pundits almost always miss the real story.