Household Survey and QCEW are both in bad shape
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 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.
The BLS reported a gain of 227k jobs which was in line or slightly above expectations. The bigger issue was that the Household Survey came in extremely weak at -355k jobs. This means the last two months have shown more than 700k jobs lost versus a positive gain of 250k+ in the Headline Report. In two months, the gap between the Headline and Household is nearly 1M jobs. These two reports could not be further apart!
Figure 1: Primary Report vs Household Survey - Monthly
This has been the case all year with the Headline diverging from the Household report by the most ever. For reference, last year was the worst year ever at that point with the Household Survey coming in 37.5% below the Headline Number. This year that number has exploded to -102.1%. Yes, while the Headline Report has shown 2M net new jobs, the Household Survey is negative.
Figure 2: Primary Report vs Household Survey - Annual
The BLS also publishes the data behind their Birth/Death assumptions (formation of new business). In November, the BLS actually assumed close to zero job gains from Birth/Death.
Figure 3: Primary Unadjusted Report With Birth Death Assumptions - Monthly
Even though zero jobs were attributed to birth/death in November, this year still represents the largest number of jobs assumed into existence ever at 54.7%. This means the BLS has assumed more than half the job gains for the Headline Report. Maybe they need to adjust their assumptions!
Figure 4: Primary Unadjusted Report With Birth Death Assumptions - Monthly
There is another report published by the BLS called the Quarterly Census of Employment and Wages (QCEW). According to the BLS, this is a far more accurate and rigorous report covering 95% of jobs available at a highly detailed level. Due to the rigor, the report is released quarterly on a several month lag.
The latest report showed that Q2 was actually pretty close to the headline number.
Figure 5: Primary Report vs QCEW - Yearly
Even with Q2 looking more normal, YTD (through June), the QCEW is still coming in at the lowest rate (65%) of the Headline Report on record.
Figure 6: Primary Report vs QCEW - Yearly
The 227k jobs number was accompanied by a pop in unemployment rate to 4.2%.
Figure 7: Change by sector
When looking over the last 12-month trend, the latest report shows a few categories that are above trend.
Figure 8: 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 | 8,313 | 10 | 12.7 | 17.6 | 20.9 | 0.1% | 0.5% | 2.5% | 9.0% |
Education Health | 26,707 | 79 | 79.0 | 80.0 | 79.4 | 0.3% | 0.9% | 3.6% | 10.7% |
Financial | 9,280 | 17 | 9.7 | 4.4 | 10.3 | 0.2% | 0.3% | 0.6% | 4.0% |
Information | 2,986 | 0 | -1.7 | -1.1 | 0.9 | 0.0% | -0.2% | -0.4% | 1.1% |
Leisure Hospitality | 17,069 | 53 | 38.7 | 24.5 | 55.1 | 0.3% | 0.7% | 1.7% | 11.6% |
Manufacturing | 12,887 | 22 | -12.7 | -5.1 | 9.8 | 0.2% | -0.3% | -0.5% | 2.7% |
Mining and Logging | 640 | 2 | 1.7 | 0.0 | 1.9 | 0.3% | 0.8% | 0.0% | 10.5% |
Other Services | 5,930 | 8 | 4.7 | 5.5 | 9.3 | 0.1% | 0.2% | 1.1% | 5.7% |
Prof Business | 22,954 | 26 | 8.3 | 7.1 | 27.3 | 0.1% | 0.1% | 0.4% | 4.3% |
Trade Trans Utils | 29,032 | -23 | -2.3 | 15.8 | 25.2 | -0.1% | 0.0% | 0.7% | 3.1% |
Government | |||||||||
Government Federal | 3,001 | -2 | 1.3 | 4.1 | 3.1 | -0.1% | 0.1% | 1.6% | 3.7% |
Government Local | 14,955 | 15 | 13.0 | 24.2 | 25.8 | 0.1% | 0.3% | 1.9% | 6.2% |
Government State | 5,534 | 20 | 20.3 | 12.6 | 11.4 | 0.4% | 1.1% | 2.7% | 7.4% |
Total | |||||||||
All | 159,288 | 227 | 172.7 | 189.5 | 280.3 | 0.1% | 0.3% | 1.4% | 6.3% |
Values in 1,000s of workers. Data as of: Nov 2024. Total Employed = Entire size of the labor market. | |||||||||
The chart below shows how the jobs data has been revised in recent months. There have been significant downward revisions since January of this year. The last two months have seen minimal changes though with a slight uptick from last months abysmal jobs report.
Figure 9: Revisions
The twelve-month revision trend is negative by 26.7k jobs per month.
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 | 56 | 43 | 4.3 | 216 | 249 | -2.8 | 790 | 692 | 2.7 |
Education Health | 225 | 217 | 2.7 | 991 | 943 | 4.0 | 2,826 | 2,846 | -0.6 |
Financial | 19 | 22 | -1.0 | 40 | 68 | -2.3 | 383 | 299 | 2.3 |
Information | -13 | 7 | -6.7 | 4 | 9 | -0.4 | 51 | 84 | -0.9 |
Leisure Hospitality | 72 | 127 | -18.3 | 251 | 408 | -13.1 | 2,059 | 2,149 | -2.5 |
Manufacturing | -86 | -31 | -18.3 | -58 | -21 | -3.1 | 368 | 376 | -0.2 |
Mining and Logging | 3 | 6 | -1.0 | -6 | -6 | 0.0 | 68 | 66 | 0.1 |
Other Services | 10 | 13 | -1.0 | 68 | 67 | 0.1 | 352 | 366 | -0.4 |
Prof Business | -48 | -4 | -14.7 | 69 | 118 | -4.1 | 1,098 | 1,208 | -3.1 |
Trade Trans Utils | 19 | -11 | 10.0 | 167 | 237 | -5.8 | 1,079 | 1,004 | 2.1 |
Government | |||||||||
Government Federal | 7 | 1 | 2.0 | 50 | 50 | 0.0 | 125 | 105 | 0.6 |
Government Local | 50 | 52 | -0.7 | 298 | 295 | 0.2 | 918 | 812 | 2.9 |
Government State | 55 | 51 | 1.3 | 139 | 132 | 0.6 | 378 | 284 | 2.6 |
Total | |||||||||
All | 369 | 493 | -41.3 | 2,229 | 2,549 | -26.7 | 10,495 | 10,291 | 5.7 |
Values in 1,000s of workers. Because this data is focused on revisions, it is as of the month prior: Oct 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. | |||||||||
Another level of detail in the Household report shows full-time vs part-time job holders. In November, both full-time and part-time job holders lost jobs.
Figure 10: Full Time vs Part Time
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 stayed steady at 62.5%.
Figure 12: Labor Market Distribution
The data discrepancy between job reports has reached historic proportions. Both the QCEW and Household Survey paint a very bleak picture versus the Headline Report which shows pretty steady job growth. Based on the election of Donald Trump, one has to assume the economy is much weaker than what the main data values are showing. At some point, reality is going to catch up. At that point, the Fed will be in a lose-lose situation.