Household survey chart from BLS, no changes calculated. Annotations by Mish.I discussed annual revisions in my previous post Huge BLS Benchmark Revisions Remove 610,000 Jobs From 2024Jobs are the establishment survey. Employment and unemployment are household survey items.The report for January does not show changes because the changes are bogus.The BLS says “In accordance with normal practice” none of this will show up on historical data or charts.With that, let’s dive into the January report. The next chart is particularly bad as noted above.Nonfarm Payrolls and Employment Level Nonfarm payrolls and employment data from the BLS chart by Mish.As explained above, those jumps did not suddenly happen.Q: When did they happen?
A: We don’t know precisely because the BLS does not say, making the chart bogus.However, the BLS does say “Without the revision, the employment gain would have been 176,000 instead of 2,234,000” as the chart shows.Historical comparisons, especially year-over-year numbers, are bogus and I will remove them from this report.Even with the revisions, full-time employment is not strong as the gap between payrolls and full-time employment is still shows.Monthly Change in Nonfarm Payrolls
Nonfarm Payrolls Change by Sector
Excluding government, and private education an health services, this was a week report.+61,000 Private Education and Health ServicesHealth care added 44,000 jobs in January, with gains in hospitals (+14,000), nursing and residential care facilities (+13,000), and home health care services (+11,000). Job growth in health care averaged 57,000 per month in 2024.In January, employment in social assistance increased by 22,000, similar to its average monthly gain of 20,000 over the prior 12 months.Demographics (aging population) and immigration explains the increase of 93,000 of the reported 143,000 jobs.Change in Part-Time Jobs

I normally post month over month changes. I have no idea what they really are due to the benchmark revisions.Multiple job holders add to nonfarm payrolls but not the number of employed.Hours and WagesThis data is frequently revised.

Last month I reported of all private employees was flat at 34.3 hours. This month I see a decline of 0.1 hours to 34.1 hours.An overall decline or rise of a tenth of an hour does not sound line much, but with employment over 163 million, it’s more significant than it appears at first glance.163.9 million * -0.2 = 32.78 million hours decline.Hourly EarningsThis data is also frequently revised. Here are the numbers as reported this month.Average Hourly Earnings of All Nonfarm Workers rose $0.17 to $35.87. A year ago the average wage was $34.47. That’s a gain of 4.1%.Average hourly earnings of Production and Nonsupervisory Workers rose $0.16 to $30.84. A year ago the average wage was $29.61. That’s a gain of 4.2%.Unemployment Rate The unemployment rate went from 4.1 percent to 4.0 percent. The BLS says the population revision impact was +0.1 percentage point making the month-over-month decline 0.2 percentage points.The data is thus weaker in jobs and stronger in employment than shown.Alternative Measures of Unemployment
Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Since U3 declined but U6 didn’t, we can conclude the decline in the unemployment rate is all due to part-time jobs.The significant decline in the number of hours worked says the same thing.Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.Some of those dropping out of the labor force retired because they wanted to retire. Some dropped out over Covid fears and never returned. Still others took advantage of a strong stock market and retired early.The rest is disability fraud, forced retirement (need for Social Security income), and discouraged workers.Birth Death ModelStarting January 2014, I dropped the Birth/Death Model charts from this report.The birth-death model pertains to the birth and death of corporations not individuals except by implication.For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.Birth-Death Methodology ExplainedI gave a detailed explanation of the model and why the hype is wrong in my June 8, 2024 post How Much Did the BLS Birth-Death Adjustment Pad the May Jobs Report?I repeat, do not subtract the birth-death number from the headline number. That’s flawed.However, it is now clear that the BLS is too optimistic about the number of jobs they believe are being created by the net creation of new businesses.Quarterly QCEW Data Provides More Evidence of BLS Jobs OverstatementOn November 20, I commented Quarterly QCEW Data Provides More Evidence of BLS Jobs Overstatement

Hard evidence from QCEW report suggests more negative revisions coming for BLS nonfarm payroll report.

Today we saw some of the impact of QCEW filtering through benchmark revisions f in the establishment survey.More revisions are coming. QCEW is only through 2024 Q2.Household Survey vs. Payroll Survey

If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.The BLS payroll reports smack of oversampling large employers and undersampling small employers where jobs have been trending lower.Job Report Key Takeaways

Trumpian UncertaintyThe reduction in immigration plus deportations will impact the economy, labor markets, and wage growth in unpredictable ways.The same applies to Trump’s firing and attempted firing of Federal government employees, and his tariffs applied, then taken back.There is always uncertainty, but Trump has taken uncertainty that to new levels. That generally is not good for the markets.Finally, there are inflationary and deflations aspects of Trump’s changes.The range of economic outcomes varies from stagflation to debt deflation depending on what Trump does and how foreign leaders react.Related PostsJanuary 10: Elon Musk Admits DOGE Can’t Find $2 Trillion In Budget CutsJanuary 31, 2025: The BLS Confirms US is Now Losing Jobs in Net Business CreationFebruary 4, 2025: Job Openings Drop by 556,000 in December, Quits Show Job Finding StressFebruary 5, 2025: ADP Payrolls Better than Expected But Two-Thirds of the Economy Has StalledFebruary 7, 2025: Huge BLS Benchmark Revisions Remove 610,000 Jobs From 2024Contrary to popular belief, this is not a strong economy. Uncertainty of Trump’s actions adds to the risk. And very few people believe a recession is even possible.One thing I am very confident of is that Trump is unlikely to significantly reduce the deficit. He’s much more likely to significantly increase the deficit, DOGE or no DOGE.In isolation, that’s stagflationary, but things are not in isolation.More By This Author:Huge BLS Benchmark Revisions Remove 610,000 Jobs From 2024Initial Unemployment Claims Increase By 11,000, Continued Claims By 36,000 December Had The Second Largest Monthly Trade Deficit In History