labor market

Are The Jobs Numbers Fake?

Jeremy Horpedahl1 Comment

Every month we get new data on the labor market in the US from the Bureau of Labor Statistics. As I pointed out last month, the labor market data from 2023 was very good!

But lately on social media, some have been to ask whether this data is credible. Specifically, several people have pointed out that the initial numbers we receive each month almost always seem to be revised downward. Since the initial reports are based on incomplete data (for the jobs data, this would be reports from employers), it is normal that there would be some revisions with more complete data.

But for 9 of the first 10 months in 2023, the revisions were downward (and even July was first revised down, only to be revised up later). And November has already been revised down once. This pattern seems a bit suspicious, as we would normally expect these errors to be somewhat random, and indeed the last time the revisions have mostly been downward was in 2008 (which was a very different year, since it was a year of job losses, not gains as in 2023).

So what’s going on?

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2023: Great Labor Market, or Greatest Labor Market?

Jeremy Horpedahl3 Comments

As 2023 winds to a close, you’ll find lots of “year-end” lists. What would a year-end list for the US labor market look like?

Last week I put together some data on the state of the US economy and compared it to 4 years ago. On many measures, sometimes to the first decimal place, the US economy is performing as well as it did in late 2019 before the pandemic.

Today I’ll go into more detail on several measures of the labor force, but I won’t only compare it to 2019. I’ll compare it to all available data. And the sum total of the data suggests the 2023 was one of the best years for the US labor market on record. Note: December 2023 data isn’t available until January 5th, so I’m jumping the gun a little bit. I’m going to assume December looks much like November. We can revisit in 2 weeks if that was wrong.

The Unemployment Rate has been under 4% for the entire year. The last time this happened (date goes back to 1948) was 1969, though 2022 and 2019 were both very close (just one month at 4%). In fact, the entire period from 1965-1969 was 4% or less, though following January 1970 there wasn’t single month under 4% under the year 2000!

Like GDP, the Unemployment Rate is one of the broadest and most widely used macro measures we have, but they are also often criticized for their shortcomings, as I wrote in an April 2023 post.

With that in mind, let’s look to some other measures of the labor market.

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Does the Unemployment Rate Tell the Whole Story about the Labor Market?

Jeremy Horpedahl2 Comments

The answer to that question is, of course, “no.” No one number can alone tell us the whole story, whether we are talking about the economy, health, education, population, or any other social statistic. But when you look at other measures of the health of the labor market, you usually find that they tell a similar story to the unemployment rate.

My goal in this post is to dive a little deeper into the data on the labor market, but really the goal is broader: to give you a little insight about how to interpret data. Some rules of thumb, perhaps. But really there is One Big Rule: numbers need context. A number on its own doesn’t tell us much of anything. How does it compare to the past? How does it compare to other places?

With the unemployment rate at historic lows for both the US and many states, I’ve started to see many people saying that, not only doesn’t the unemployment rate give us the full story, but many other indicators point in the opposite direction. Is this true? Let’s dig into the data. Here’s one example of someone saying this for Arkansas. I’ll focus on Arkansas, since that’s where I live and I pay attention to the economic data here pretty closely, but I’ll also refer to national data where appropriate.

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