By Tom Ozimek
Downward revisions of employment data for 10 of the past 12 months show that the Biden administration initially overstated job growth in 2023 by nearly half a million positions.
Touting job growth is a standard talking point for political leaders, with the Bureau of Labor Statistics’ (BLS) monthly data releases—so-called nonfarm payrolls—providing an opportunity for presidents to take credit for a strong-performing economy.
December’s nonfarm payrolls report showed that the economy added 216,000 new positions. President Joe Biden called 2023 a “great year for American workers” and bragged that “the economy created 2.7 million new jobs in 2023—a year when the unemployment rate was consistently below 4 percent.”
While the 2.7 million jobs added in 2023 that President Biden touted are already adjusted except for December numbers, which will be revised later, they were overstated by an average of around 44,000 per month when the numbers were first presented.
For 10 of the 11 months last year for which revisions are known, the direction has been the same—down. July 2023 was the only exception to the rule (initially reported 187,00, later revised up to 236,000).
Overall, the downward revisions in 2023 amounted to 443,000.
“Time to stop trading off the payroll data,” economist David Rosenberg said in a post on X. “The downward revisions totaled an epic 443k.”
Up or Down?
While the size and direction of the revision for December job growth data won’t be known until January 2024 data is released at the beginning of February, a downward revision by around 44,000 (the average monthly downward revision last year) wouldn’t be much of a surprise.
“Dec.’s number is likely to be revised lower next month,” Peter Schiff, chief economist and global strategist at Euro Pacific Capital, said in a post on X. He pointed out that ten “of the last 11 jobs reports have been revised sharply lower” while suggesting something odd is going on.
“What are the odds that’s random? Try tossing a coin 11 times and see how often either heads or tails come up 10 times out of 11 tosses?” he asked.
BLS says it’s normal for there to be revisions in the job growth data since the numbers are based on surveys, and they’re normally adjusted in subsequent months when more information becomes available.
“Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors,” BLS said in a statement.
Other market watchers have expressed concern that the bulk of the revisions in 2023 were all down.
“Raises a lot of concerns about the accuracy of economic data interpretation. We need transparent data sources,” Ulrik Lykke, co-founder of Peanuds, a fintech firm, said in a post on X.
Brent Donnelly, president of Spectra Markets, said that the downward revisions are a recent phenomenon.
“For all those saying NFP is rigged because it’s always strong then revised lower. That’s the opposite of what is true,” he wrote in a post on X. “The downward revisions are a recent thing.”
Mr. Donnelly shared a chart going back to 1997 that shows there have been 172 upward revisions and 149 downward revisions over that period, “and the average upward revision is much larger than the downward ones.”
“Revisions go up. Revisions go down. It’s noise, not a complex government conspiracy,” he wrote.
He said initial jobless claims, which are released weekly and show the number of people making an initial filing for unemployment, are a better gauge of labor market dynamics.
“Less noise. More timely,” he wrote.
The latest job claims data shows that initial claims for unemployment benefits fell to 202,000 for the week ended Dec. 30, the lowest level since mid-October.
Still, claims data tend to be volatile around the end of the year because of the holidays.
For 2023, initial claims mostly bounced around the lower end of the 194,000 to 265,000 range.
Meanwhile, economists who dug deeper into the monthly BLS jobs report have noted some concerning labor market trends.
‘Bizarre Divergence’
The latest BLS job data shows that the government was the No. 1 job creator, adding 52,000 new positions and accounting for one-quarter of all new jobs.
In 2023, the government produced an average of 56,000 jobs a month, more than double the average monthly gain of 23,000 in 2022., per the BLS data.
“That’s an amazing statistic. Government jobs are eating the private sector alive,” RedBalloon CEO Andrew Crapuchettes told The Epoch Times in an earlier interview.
Another concerning statistic is that the labor force participation rate fell sharply in December.
The measure, which reflects the share of the civilian working-age population employed or searching for a job, tumbled from 62.8 percent in November to 62.5 percent last month.
Before the pandemic, the labor force participation rate was around 63.5 percent.
Not only that, but the number of part-time positions climbed to its highest level in five years while a record number of people are working two or more jobs—signs that suggest American workers are struggling to make ends meet.
So, while President Biden boasted about solid job growth data for 2023, there is a suggestion that all may not be as well as it seems.
“If you’re puzzled as to how the Biden administration’s economic data can be so rosy while your own financial situation has deteriorated so quickly, you’re not alone,” “E.J. Antoni, a Heritage Foundation economist, said in a recent analysis.
“Part of the explanation for this bizarre divergence lies in the quiet revision process that has consistently downgraded the official data after the initial headline got all the attention,” he continued. “In short, the economy is not as strong as we’ve been led to believe.”
Andrew Moran contributed to this report.
