BLS Data Overstated U.S. Payrolls by 800K, Major Revision Confirms

BLS Data Overstated U.S. Payrolls by 800K, Major Revision Confirms 

In March, when most of Wall Street and economists were still accepting the data released by the Biden administration's Bureau of Labor Statistics (BLS) at face value—despite its reliance on inaccurate and hastily compiled figures intended to paint a rosier picture of the economy—we conducted an in-depth analysis using the more reliable data from the Philadelphia Fed's preview of the Quarterly Census of Employment and Wages (QCEW). We warned our readers that U.S. payroll figures were inflated by at least 800,000 jobs.

Our analysis concluded that the BLS had overstated payrolls by 800,000 through December 2023, with potential further inaccuracies extending into 2024. We highlighted the statistical improbability of these errors consistently exaggerating economic strength. We also pointed out that the true average monthly payroll increase in 2023 was just 130,000 jobs, far below the 230,000 average touted by the White House as evidence of the success of "Bidenomics."

This issue came to a head when the BLS released its annual nonfarm payrolls benchmark revision. The revision, delayed by over half an hour, confirmed our predictions almost exactly, adjusting March 2024's total nonfarm employment downward by 818,000 jobs—a revision primarily affecting high-paying sectors like professional services, leisure, and manufacturing.

These revisions confirm what we had been cautioning for much of the year: the labor market began weakening much earlier than mainstream views suggested. The recent release of the July jobs report further validated our warnings, showing a sluggish pace of hiring and rising unemployment, despite other indicators suggesting a more moderate slowdown.

Our analysis revealed that the labor market was significantly weaker than widely believed, with the BLS's flawed data leading to an overstated job growth figure. Instead of an average of 218,000 jobs added per month in 2023, the true figure was closer to 150,000—a 31% decline. This misrepresentation has serious implications, as the market would have reacted differently had the true data been known.

This situation casts a negative light on the economic policies of the Biden administration, which appeared to rely on inflated job numbers to promote its achievements. The revelation that 800,000 jobs were "missing" undercuts the administration's narrative of economic success. On the other hand, such overestimations served the political purpose of generating momentum and positive perception, at least until the truth was revealed.

The broader implications include a likely rate cut by the Federal Reserve and growing skepticism about the reliability of government economic data. Political reactions have been sharply divided, with critics accusing the BLS of serving as a tool for government propaganda. For example, RFK Jr. and others have slammed the BLS, arguing that it distorts economic reality to fit the administration's agenda and calling for the agency's elimination. As the mainstream media grapples with these revelations, it will be harder to ignore the significant discrepancies between reported and actual economic data.