The labor market may have been much weaker than the government let on in 2022. While the Bureau of Labor Statistics initially reported the U.S. economy added 1.2 million jobs last spring, a new report shows the private sector had a net loss of 287,000 jobs during the same time period, a difference of nearly 1.5 million.
The latest data comes from the Business Employment Dynamics report by the BLS released last week, looking at private sector job gains and losses from March to June 2022.
Last year, the same agency said in monthly Current Employment Statistics reports that in April, May and June, the U.S. nonfarm economy had gained a collective 1.19 million jobs. That was later revised down to 1,047,000.
While the two data sets are not an apples-to-apples comparison, the total discrepancy in second-quarter data is rather large, especially coming from the same agency.
“Although the BED and CES have scope and methodological differences, series from the two sources tend to show the same general trends over the long term,” BLS told Straight Arrow News in an email response, adding that both are subject to revisions.
This is the second major report to come out showing significant job growth discrepancies in the second quarter. Last month, the Philadelphia Federal Reserve Bank released a report saying it thought the government overestimated job growth by more than one million. The Philadelphia Fed calculated 10,500 net new jobs added versus the 1,047,000 revised estimate by the BLS.
At the time, BLS diminished the findings in an email to Straight Arrow News.
“Using a simple methodology and a series of assumptions, the Philadelphia Federal Reserve Bank benchmarked to a less complete version of the [Quarterly Census of Employment and Wages] data than is available to BLS,” BLS economist Emma Sillman responded. “BLS does not believe that the monthly [Current Employment Statistics] data dramatically overestimated employment growth.”
But now, BLS’s own data may indicate otherwise, and several months later, data revisions cannot revise actions taken during that time period.
“Look at the labor market, you’ve got growth, I think payroll jobs averaging 450,000 per month,” Federal Reserve Chair Jerome Powell said in a press conference in July after raising the benchmark interest rate another 75 basis points.
The Fed repeatedly cited strong job growth as it aggressively pushed interest rates up to fight inflation. But the “strong economy” might have been showing cracks even the Bureau of Labor Statistics didn’t see at the time.
BLS is releasing its latest national data revisions on Friday with the January jobs report.