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What makes the new monthly jobs report less reliable than most

Umito November 2, 2024

Expectations for this week showed projections of around 110,000 new jobs having been added in the United States in October. It turns out that, according to the new report According to the Bureau of Labor Statistics, the totals were actually much worse than that. NBC News reported:

The United States added just 12,000 jobs last month, a figure that economists say was hurt by two hurricanes and a strike. Yet, despite these reservations, the report highlights a slowdown in the labor market. The latest payroll figure marks the smallest monthly job gain since December 2020, at the height of the Covid pandemic, with the Bureau of Labor Statistics saying the US effectively added no new net payrolls last month.

The unemployment rate in the United States remained unchanged at 4.1%.

At first glance, this might look like a disaster. After years of strong job growth, seeing new hires fall to a four-year low, at least superficially, seems scary.

But this is one of the rare months in which the opening lines of the BLS report tell only part of a larger story. The New York Times published this report before the new data reaches the public:

The last few months have been marked by unusual disruptions. First there was the Boeing strike in September, which removed some 35,000 workers from their workforce, plus another 6,000 workers from smaller strikes. Then came Hurricanes Helene and Milton, which sent unemployment claims soaring by about 35,000 in early October.

The article added that a decline in hiring “would not be an accurate representation of employers’ appetite to hire.”

In fact, economists and market analysts have issued numerous warnings this week that the jobs report will paint a misleading picture. The Associated Press reported a few days ago, the report “would include some of the most distorted monthly employment figures in years.”

In other words, if you only see the top line, you’re missing the relevant context.

As for the big picture, let’s also return to previous cover to put the data into perspective. During the first three years of Donald Trump’s presidency — when the Republican declared the U.S. economy to be the strongest in the history of the planet — the economy created about 6.38 million jobs, over all of 2017, 2018 and 2019.

By the latest count, the U.S. economy has added about 16.5 million jobs since January 2021, more than double the combined total from Trump’s first three years. (If we include the fourth year of the Republican mandate, the data it looks even worse for him.)

For additional context, consider employment growth by year over the past decade, updated to reflect the latest data revisions:

2013: 2.3 million

2014: 3 million

2015: 2.7 million

2016: 2.3 million

2017: 2.1 million

2018: 2.3 million

2019: 1.98 million

2020: -9.3 million

2021: 7.2 million

2022: 4.5 million

2023: 3 million