Here are the details regarding the job growth discrepancy for Q4 2023:
- Initial Reports: The Bureau of Labor Statistics (BLS) initially reported a net gain of 637,000 nonfarm payroll jobs for Q4 2023.
- Revised Figures: The Business Employment Dynamics (BED) report later showed a net employment gain of 344,000 private sector jobs for the same period.
- Discrepancy: This means there was an overestimation of approximately 293,000 jobs in the initial reports.
The overestimation was largely due to the “Birth-Death” model used by the BLS, which estimates the number of jobs created by new businesses minus the jobs lost by closing businesses. This model can sometimes lead to significant revisions when more accurate data becomes available.
Note that the business employment dynamics (BED) report utilizes data from 9.1 million establishments, while the data for monthly nonfarm payrolls comes from just 670,000 establishments; the BED report clearly has the law of large numbers on its side when debating accuracy here
— E.J. Antoni, Ph.D. (@RealEJAntoni) July 24, 2024
Nonfarm Payrolls claim 637K jobs were added in Q4 2023.
The actual figure is 264K, a miss of 58%.
This follows a Q3 2023 jobs total that was NEGATIVE.
Folks like me have been beating the drum on soft labor for a reason. Headline figures are grossly overstated. pic.twitter.com/P6UByXpj28
— 𝐓𝐗𝐌𝐂 (@TXMCtrades) July 24, 2024
Sources:
https://www.foxbusiness.com/economy/initial-us-employment-reports-overstated-jobs
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