via Mike Shedlock
Based on QCEW data, the BLS may have overstated 2023 end of year jobs by 800,000.
QCEW stands for Quarterly Census of Employment and Wages. It is far more accurate but less timely than nonfarm payrolls from the BLS CES Sample.
The Bureau of Labor Statistics (BLS) collects data each month on employment, hours, and earnings from a sample of nonfarm establishments through the Current Employment Statistics (CES) program. The CES survey includes about 119,000 businesses and government agencies, which cover approximately 629,000 individual worksites drawn from a sampling frame of Unemployment Insurance (UI) tax accounts covering roughly 11.3 million establishments. The active CES sample includes approximately 30 percent of all nonfarm payroll employees in the 50 states and the District of Columbia.
Each year, CES-National estimates are benchmarked to the most recent Quarterly Census of Employment and Wage (QCEW) data, based on Unemployment Insurance records, along with a small amount of employment data that is not covered by QCEW.
Household Survey and Employment Level
The Employment Level is from the BLS Household Survey. It’s the same survey that calculates the unemployment rate each month.
The employment level is binary. One either worked or didn’t. But in the CES nonfarm payroll report, a person is counted more than once if they work more than one job.
For example, someone working three jobs is counted once in Household Survey but three times in nonfarm payrolls. Nonetheless employment level is higher because it includes everyone, not just nonfarm work.
Early Benchmarks for All 50 States and the District of Columbia
On March 14, the Philadelphia Fed released its Early Benchmarks for All 50 States and the District of Columbia
I created the lead chart by downloading state-level data + DC, then summing the states.
Key Points for 2023 Q3 by the Philadelphia Fed
- Based on both the pre-benchmark CES sum of states and the U.S. CES, payroll jobs grew 1.7 percent.
- The revised CES sum-of-states growth rate is 0.5 percent.
Although the Philadelphia Fed uses a sum-of-states method it offers this caveat:
The estimates obtained from the sum of our EB state estimates are not designed nor intended to be an accurate measure of national employment. Moreover, the BLS warns that, owing to statistical limitations, it “does not compile a ‘sum-of-states’ employment series and cautions users that such a series is subject to a relatively large and volatile error structure.” This caveat also applies to our EB series.
I am very aware, as in every monthly job report, where the sum of BLS subtotals don’t match the stated total.
Nonetheless, the Philadelphia Fed reports the sum of states percentages anyway.
Why? The only explanation that makes any sense is QCEW data is more accurate than the BLS monthly reports.
Jobs Up 275,000 with 52,000 More Government Jobs, Employment Down 184,000
On March 8, I noted: Another seemingly strong jobs headline falls apart on closer scrutiny. The massive divergence between jobs and employment continues.
Payrolls vs Employment Gains Since March 2023
- Nonfarm Payrolls: 2,602,000
- Employment Level: +144,000
- Full Time Employment: -284,000
For more details and discussion, please see Jobs Up 275,000 with 52,000 More Government Jobs, Employment Down 184,000
Based on QCEW data, more negative revisions are on the way.