The divergences are getting even bigger
This article first appeared on SchiffGold.
The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the headline number, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.
The BLS reported a gain of 272k jobs which was above expectations. However, the trend this year has been a wildly divergent Household Survey and that continued again this month. The gap between the Household Survey and the Headline number was 680k jobs! That is a miss of -150%!
Figure 1: Primary Report vs Household Survey - Monthly
Even with the blowout Household report from March (driven entirely by part time jobs - Figure 6), the Household report is coming in way below the Headline number. The chart below shows that this trend has been in place for a few years but has become completely unhinged this year. YTD, Headline number is +1.29M while the Household Survey shows a YTD loss of 100k.
Figure 2: Primary Report vs Household Survey - Annual
The BLS also publishes the data behind their Birth/Death assumptions (formation of new business). In May, the BLS assumed 231k jobs added in their birth/death assumptions. This is the second highest percentage of assumptions relative to the total raw job gains since December and the third highest in a year.
Figure 3: Primary Unadjusted Report With Birth Death Assumptions - Monthly
The annual view paints an even more stark picture showing that raw jobs are 46k for the year. Without Birth/Death that number drops to -557k because Birth/Death makes up with +603k.
Figure 4: Primary Unadjusted Report With Birth Death Assumptions - Monthly
The 272k jobs surprised to the upside but with the unemployment rate rising slightly to 4%.
Figure 5: Change by sector
Another level of detail in the Household report shows full-time vs part-time job holders. While part-time had been leading the way for months, April saw a big reversal where part-time jobs were replaced by full-time jobs. Then in May, a lot of those full-time jobs disappeared.
Figure 6: Full Time vs Part Time
A number of categories saw some big improvements compared to recent averages: Manufacturing, Professional Business, and Trade/Transport.
Figure 7: Current vs TTM
The table below shows a detailed breakdown of the numbers.
Monthly Average Change | Total % Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
Category | Total Employed | Current Month | 3 Months | 12 Months | 3 years | Current Month | 3 Months | 12 Months | 3 years |
Private Sector | |||||||||
Construction | 8,228 | 21 | 19.3 | 20.9 | 23.1 | 0.3% | 0.7% | 3.1% | 10.1% |
Education Health | 26,279 | 86 | 89.3 | 89.9 | 73.8 | 0.3% | 1.0% | 4.1% | 10.1% |
Financial | 9,234 | 10 | 4.0 | 3.5 | 13.1 | 0.1% | 0.1% | 0.5% | 5.1% |
Information | 3,014 | 0 | -1.0 | -3.0 | 5.4 | 0.0% | -0.1% | -1.2% | 6.5% |
Leisure Hospitality | 16,947 | 42 | 36.0 | 34.9 | 88.5 | 0.2% | 0.6% | 2.5% | 18.8% |
Manufacturing | 12,965 | 8 | 2.7 | 2.4 | 19.5 | 0.1% | 0.1% | 0.2% | 5.4% |
Mining and Logging | 633 | -4 | -2.7 | -0.8 | 2.2 | -0.6% | -1.3% | -1.4% | 12.3% |
Other Services | 5,907 | 6 | 7.7 | 8.2 | 14.8 | 0.1% | 0.4% | 1.7% | 9.0% |
Prof Business | 22,985 | 33 | 16.3 | 9.1 | 51.8 | 0.1% | 0.2% | 0.5% | 8.1% |
Trade Trans Utils | 29,032 | 27 | 34.7 | 13.1 | 43.9 | 0.1% | 0.4% | 0.5% | 5.4% |
Government | |||||||||
Government Federal | 2,999 | 4 | 6.0 | 7.1 | 3.1 | 0.1% | 0.6% | 2.8% | 3.7% |
Government Local | 14,865 | 34 | 29.7 | 29.8 | 28.1 | 0.2% | 0.6% | 2.4% | 6.8% |
Government State | 5,455 | 5 | 7.0 | 14.6 | 7.8 | 0.1% | 0.4% | 3.2% | 5.2% |
Total | |||||||||
All | 158,543 | 272 | 249.0 | 229.7 | 375.0 | 0.2% | 0.5% | 1.7% | 8.5% |
Values in 1,000s of workers. Data as of: May 2024. Total Employed = Entire size of the labor market. | |||||||||
The chart below shows how the jobs data has been revised in recent months. The bigger revisions havebeen to the downside, but there have been a few upward revisions.
Figure 8: Revisions
Over the last three months, the data has been revised down by an average of 13k per month and 6.2k over 12 months. These revisions go unnoticed by the mainstream.
3 Month Compare | 12 Month Compare | 3 Year Compare | |||||||
|---|---|---|---|---|---|---|---|---|---|
Category | Current | As Of Published | Avg Month Diff | Current | As Of Published | Avg Month Diff | Current | As Of Published | Avg Month Diff |
Private Sector | |||||||||
Construction | 61 | 69 | -2.7 | 246 | 220 | 2.2 | 800 | 661 | 3.9 |
Education Health | 262 | 269 | -2.3 | 1,084 | 1,073 | 0.9 | 2,618 | 2,685 | -1.9 |
Financial | -5 | 19 | -8.0 | 45 | 68 | -1.9 | 472 | 334 | 3.8 |
Information | -6 | -8 | 0.7 | -39 | -8 | -2.6 | 220 | 193 | 0.8 |
Leisure Hospitality | 92 | 96 | -1.3 | 416 | 438 | -1.8 | 3,353 | 2,930 | 11.8 |
Manufacturing | -9 | 16 | -8.3 | 16 | 72 | -4.7 | 725 | 634 | 2.5 |
Mining and Logging | -4 | -4 | 0.0 | -2 | -12 | 0.8 | 82 | 91 | -0.2 |
Other Services | 27 | 29 | -0.7 | 102 | 107 | -0.4 | 533 | 500 | 0.9 |
Prof Business | 22 | 36 | -4.7 | 125 | 191 | -5.5 | 1,895 | 1,678 | 6.0 |
Trade Trans Utils | 131 | 106 | 8.3 | 171 | 195 | -2.0 | 1,617 | 1,408 | 5.8 |
Government | |||||||||
Government Federal | 21 | 15 | 2.0 | 87 | 69 | 1.5 | 101 | 112 | -0.3 |
Government Local | 89 | 83 | 2.0 | 349 | 330 | 1.6 | 1,001 | 894 | 3.0 |
Government State | 30 | 24 | 2.0 | 187 | 119 | 5.7 | 261 | 179 | 2.3 |
Total | |||||||||
All | 711 | 750 | -13.0 | 2,787 | 2,862 | -6.2 | 13,678 | 12,299 | 38.3 |
Values in 1,000s of workers. Because this data is focused on revisions, it is as of the month prior: Apr 2024. "Current" shows the change in employment after revisions. "As Of Published" shows change in employment at time of release. "Avg Month Diff" shows the average monthly change from the revisions. | |||||||||
The chart below shows data going back to 1955.
Figure 9: Historical Labor Market
The labor force participation rate is still well below the highs before the Global Financial Crisis. This month it stayed steady at 62.5%.
Figure 10: Labor Market Distribution
Headline numbers continue to show moderate strength but the Household Survey tells an entirely different story. At some point, one of these two reports will catch up to the other. It seems likely that the Household Survey is more accurate and paints a more accurate picture of the labor market.
Data Source: https://fred.stlouisfed.org/series/PAYEMS and also series CIVPART
Data Updated: Monthly on first Friday of the month
Last Updated: May 2024
Interactive charts and graphs can always be found on the Exploring Finance dashboard: https://exploringfinance.shinyapps.io/USDebt/