When the federal government released their June employment figures, Vice President Kamala Harris grinned. ” The latest employment record shows America’s economy added 206, 000 work in June, continuing report work growth”, Harris said on Twitter on July 5 in celebration of that month’s Bureau of Labor Statistics transfer. That’s more employment created in June than Donald Trump did during his whole presidency.
A fortnight later, Harris, then her group’s standard-bearer after President Joe Biden quickly dropped out of the running, faced GOP calls that she eat some bird. These accusations were brought on by a significant adjustment made by the BLS to the jobs data from March of last year to March of this year. The regular estimates had been off by over 818, 000 work all told, BLS found. Harris ‘ increased job numbers are likely to experience a downward revision as well.
Job person Johannes Oveida looks over a brochure at a career fair in Allentown, Pennsylvania, March 7, 2024. ( Michael Rubinkam/AP )
At a North Carolina rally on August 21, Trump claimed that the Harris-Biden administration had been allegedly fabricated to conceal the true magnitude of the financial damage the two have caused America. According to the Bureau of Labor Statistics ‘ new data,” the administration padded the numbers with an additional 818, 000 jobs that do n’t exist,” listen to this.
Fact-checkers were fast to prey on the past and possibly future president’s remarks. ” There’s no evidence for such claims, and the Trump campaign has n’t provided any”, wrote Lori Robertson for FactCheck. nonprofit.
Trump was no wrong, nevertheless, that the BLS adjustment was significant and probably destructive. Because of its size, Federal Reserve Chairman Jerome Powell almost instantly announced an interest rate reduce would take place in September. Powell did this to quiet areas and to meet the Fed’s “dual authority” of taming prices and boosting work.
Concerning the BLS’s data trouble, many Republican senators pressed questions. The political slog at the heart of the issue is a letter to acting Labor Secretary Julie Su asking for “information regarding the BLS’s methodology for estimating job numbers ]and ] why the BLS has failed to accurately assess changes in labor participation.
” These disparities, representing work that the Biden-Harris Administration claimed to have created, which just do not exist, were reported as evidence of economic dynamism and good employment creation”, Sens. Roger Marshall (R-KS), Ted Budd (R-NC), Rick Scott (R-FL ), Marsha Blackburn (R-TN), and Markwayne Mullin (R-OK ) complained.
” There were multiple instances over the last year in which news outlets reported that the job market was’ strong,’ ‘ red-hot,’ or ‘ sizzling,’ to name a few”, the senators added. The initial BLS data were taken literally and, in the end, the job market was strong.
A Manhattan store advertises job openings, July 5, 2024. ( Spencer Platt/Getty Images )
There was likely some referee-working in that complaint, but sometimes the players have a point. Evidence suggests that the job market is in decline and that the federal government and financial institutions are catching up.
Financial services firm Comerica wrote in its evaluation that” the July jobs report was significantly weaker than expected.” Employers added only 114, 000 nonfarm payroll jobs, the unemployment rate increased to 4.3 %, and the average hourly earnings growth decreased to 3.6 %. That resulted in the highest unemployment rate and slowest wage growth since 2021 for July.
It gets worse. Other BLS data “emphasize how the job market is softening”, Comerica reported, and this softness is not isolated. To wit:” July’s weakness was n’t just in Texas, where Hurricane Beryl was a huge disruption, but spread across a number of states on the East Coast, Midwest, and High Plains”.
No more tight job markets
A tight job market, or at least the appearance of one, was something that workers had going for them for the past few years. It enabled them to negotiate significant raises and other concessions, including more work-from-home arrangements long after COVID-19 had shifted down from a pandemic to an endemic irritant.
As workers evaluate their finances and choices for the future, where does the most recent BLS report leave them? As possible, let’s say the September or October jobs reports paint a slightly rosier picture. How many people will accept those figures for what they are at this point? And how did the BLS miss by over 800, 000 jobs in its monthly survey?
A Washington Examiner request was answered by BLS Commissioner Erika McEntarfer, but she did not respond. Fortunately, University of Central Arkansas economist Jeremy Horpedahl provided helpful information for the Washington Examiner on his blog Economist Writing Every Day.
” I think a big challenge post-2020 is that some of the BLS models just are n’t working as well as they used to”, Horpedahl told the Washington Examiner. ” This is understandable, and they are always updating the models, but the structure of the labor market might just be fundamentally different now”.
Horpedahl noted that BLS has previously required significant annual revisions. One earlier significant revision revealed that the department had undercounted job growth during the initial Biden administration. That fact would seem to undercut charges of blatant manipulation, he suggested.
He added that even with the downward revisions, the job market still made some gains. The American economy is constantly churning out as a result of market demands. Economists generally believe that the number of new jobs created in a month is about what it takes to tread water. Anything that is red and anything that is higher than that is good for workers.
” If we spread the 818, 000 jobs revision over 12 months, which is, more ]or ] less, what BLS will eventually do once they have the final numbers, this amounts to 68, 000 fewer jobs per month on average”, Horpedahl explained.
He added,” Over that time frame]March 2023 to March 2024], the average monthly job growth was 242, 000 jobs. Crucially, the lowest monthly job growth during that period was 165, 000 jobs, in October 2023. Cutting 68, 000 from that month would be significant, but each and every month in the revision period would still be positive.
Still, this was a big miss, Horpedahl admitted, with job growth “overstated by perhaps 40 %”. He suggested that this should prompt a reassessment of how much stock people put into monthly reports as opposed to quarterly and yearly reports, which are more effective at capturing the entire labor force. He continued, though, that the monthly reports “probably get the direction of job growth correct.”
Debating the economy
Harris is running as the anointed vice president. Sometimes that works out. Ronald Reagan’s vice president, George H. W. Bush, managed to win 40 states and 426 electoral votes in 1988. And sometimes it is n’t nearly enough. Lyndon Johnson’s vice president, Hubert Humphrey, won only 13 states and 191 electoral votes in 1968.
What that means in practice is that the Biden administration’s strengths are her strengths and its weaknesses are her weaknesses. The former 117th Congress ‘ Democratic congressional majority and the White House spent a lot of money on progressive issues. The Fed’s moves to help finance this binge, coming soon after the disruptions and bailouts related to COVID-19, caused significant inflation.
Due to the price spike, polls consistently favor Trump over Biden, who the president groused about, on economic issues. Harris may have had a honeymoon effect, but polls have suggested Harris has a better chance of winning. The revised job numbers put a chance on the end of that honeymoon.
At an Aug. 27 rally in Grand Rapids, Michigan, Sen. J. D. Vance (R-OH), the Republican vice presidential candidate, previewed what promises to be contentious presidential and vice presidential debates. Chanting jobs were mentioned in his case for voters to “tell Kamala Harris’you are fired.'”
” Now, last week, the biggest heist in American history happened right under Kamala Harris’s nose”, Vance said. ” Somebody stole 818, 000 jobs that she and Tim Walz have been bragging about. Did you see that? Where’d they go”?
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The Republican audience enjoyed the vice presidential hopeful. ” Now, you may not have heard this because our friends in the back, the media, does n’t like to talk about it”, he said. ” But what actually happened is this: The Harris administration had to come clean about the fact that more than a quarter of the jobs that were supposed to be created last year were fake. They never existed”.
Vance threw the knife in preparation for the “biggest job change since the financial crisis,” he said.
Jeremy Lott is the author of The Warm Bucket Brigade: The Story of the American Vice Presidency.
