The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the Headline Report, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.
Current Trends
The jobs report showed a very small increase of 22k jobs. This month actually saw a big deviation in the Household Survey to the upside which is quite rare. The Household Survey had 288k jobs. In almost all months (except in January), the Household Survey is constantly underperforming the headline number.
Figure: 1 Primary Report vs Household Survey – Monthly
For the year, the Household Survey is significantly higher due to the data anomaly in January. However, if we removed the data correction in January, the Household Survey would actually show a loss of 790k.
Figure: 2 Primary Report vs Household Survey – Annual
Switching to the headline report…
The BLS publishes the data behind their Birth/Death assumptions (formation of new business). In August, there were 90k jobs assumed into existence. Without these jobs assumed into existence, it is very likely that the jobs report this month would have been negative.
Figure: 3 Primary Unadjusted Report With Birth Death Assumptions – Monthly
For the year, the birth death assumption is positive of 961k against a negative number for actuals (-1.47M). This means all positive growth YTD is directly tied to the birth/death assumptions.
Figure: 4 Primary Unadjusted Report With Birth Death Assumptions – Monthly
Digging Into the Headline Report
The 22k jobs number was accompanied by a rise in the unemployment rate to 4.3%.
Figure: 5 Change by sector
Jobs by Category
When looking at the last 12-month trend, most of the categories were actually above trend.
Figure: 6 Current vs TTM
The table below shows a detailed breakdown of the numbers.
Figure: 7 Labor Market Detail
Revisions
The chart below shows how the jobs data has been revised. So far, every month this year has been revised lower by a significant margin, except for the most recent month (July). This shouldn’t come as too much of a surprise considering the head of the BLS was fired last week for posting too many negative revisions.
Figure: 8 Revisions
Over the last twelve months, jobs have been revised down by about 26k per month and revised lower by 52k over the last three months!
Figure: 9 Revisions
More Detail in the Household Survey
Another level of detail in the Household report shows full-time vs part-time job holders. This month shows that full-time jobs were lost while part-time were gained.
Figure: 10 Full Time vs Part Time
Historical Perspective
The chart below shows data going back to 1955.
Figure: 11 Historical Labor Market
The labor force participation rate is still well below the highs before the Global Financial Crisis. This month it increased slightly to 62.3%.
Figure: 12 Labor Market Distribution
Conclusion
Well, it’s hard to put a ton of stock in the data right now. After the number of revisions and deviations in all the jobs reports recently, Trump fired the head of the BLS. Of course, the reason wasn’t inaccuracy or inconsistency… it was because he didn’t like the numbers.
The result this month was a revision higher for July, but an overall very weak headline report. With AI adoption and a relatively weak economy, it’s hard to see where the jobs numbers are going to get back on track and moving higher. At some point, Trump is going to have to come to terms with the fact that this economy is not very strong.
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