In news that will shock absolutely no one who has had their eyes open since the beginning of the Biden administration, new data released by the Federal Reserve Bank of Philadelphia has estimated that the United States economy has created way less new jobs than the estimates from the Bureau of Labor Statics has reported, which has led many economists to believe that our economy is far weaker than numbers are making it seem. In other words, somebody, somewhere, is telling a big, fat lie.
Who would have ever guessed that individuals in the Biden administration would tell some whoppers during an election year? Who could have possibly seen that coming? I hope you caught the sarcasm. I’m laying it on pretty thick.
via The Daily Caller:
For the third quarter of 2023, the Philadelphia Fed now estimates that the number of total workers in the U.S. economy increased from 155,941,000 to 156,127,000, a gain of just 186,000, while the BLS estimates that the employment count rose from 156,027,000 to 156,667,000, an increase of 640,000. The lower estimates from the Philadelphia Fed indicate that the economy is not doing nearly as well as initial government figures have advertised, with poor underlying economic conditions making the data hard to accurately calculate initial projections, resulting in huge overestimations by the BLS, economists told the Daily Caller News Foundation.
“The Federal Reserve Bank of Philadelphia’s advance estimates have been much closer to the quarterly census data, which covers more than 95% of jobs and is more accurate than the monthly job reports,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, went on to say during an interview with the Daily Caller News Foundation. “This points to the economy being weaker than many of the official data would suggest and helps explain the disparity between low approval of the economy in polls and the positive official data. It also points to weaker future economic growth.”
Consumer sentiment, a measurement of how consumers feel about the economy, has continued to be depressed below pre-COVID-19 pandemic levels, where it typically measured between 90 and 100 index points, but has since remained lower, most recently rising to just 79 points, according to a survey by the University of Michigan. If Americans are correct about the perceived poor health of the economy, it would contradict seemingly strong economic growth in the second half of the last year, with gross domestic product rising 3.2% and 4.9% in the third and fourth quarters of 2023, respectively, according to the Bureau of Economic Analysis.
“At this point, there’s no denying that something is seriously wrong with the methodology at the BLS,” Antoni stated during his conversation with the DCNF. “The question is, why haven’t they fixed it? Today feels eerily reminiscent of 2008 when the economy was quickly deteriorating and the BLS’ methods were consistently overestimating the number of jobs in the economy month after month. Revisions, even occasionally large ones, are normal, but the problem is that the revisions are so consistently in the same direction. It would be foolish to take these monthly job numbers at face value.”
The Federal Reserve in Philadelphia has produced accurate results in the past and produces its own estimates for job data to try and make predictions concerning upcoming changes to the BLS numbers. Last year, the BLS overestimated the number of jobs within the economy by almost 105,000 PER MONTH. Let that hit you in the thinker for a moment. By the end of the year, it was discovered there was 1,225,000 less jobs than previously thought.
That’s a pretty big oops.
In the midst of the Great Recession in 2008, the BLS revised its jobs numbers down for 11 months out of that year, according to the BLS. In total, final numbers were revised down by 877,000 compared to initial estimates, an average of around 73,000 per month.
“When economies slow, individuals may be less likely to respond to surveys due to social desirability bias, as feelings of shame or stigma associated with unemployment may deter participation,” Peter Earle, an economist who works for the American Institute for Economic Research, went on to tell the DCNF. “A factor known as ‘time poverty’ may also be a factor, as individuals either out of work or worried about losing their jobs prioritize job searches or taking on more hours, leaving them with limited time to participate in surveys.”
So, this seems like a big deal:
BLS said jobs grew 640k in Q3 '23, but PHL Fed now estimates it was only 187k, or less than a third of the BLS estimate; this comes on the heels on the quarterly survey estimate for Q2 '23 coming in half the size of BLS's monthly jobs numbers: pic.twitter.com/1LxZSk9kAF— E.J. Antoni, Ph.D. (@RealEJAntoni) March 14, 2024
Layoffs at companies located within the United States have gone through the roof in recent months as many businesses continue to look for ways they can adjust their number of employees to take market conditions into account. At the beginning of the year, layoffs rose significantly, 136 percent month-to-month to 82,307 positions followed by another 3 percent increase in February added on top of that.
The BLS then estimated that the U.S. added 275,000 nonfarm payroll jobs in the month of February, which was way higher than the originally expected 200,000. However, unemployment went up from 3.7 percent to 3.9 percent. How does that make sense? Can a massive number of new jobs added to the economy still lead to an increase in unemployment? Make it make sense.
The U.S. has also so far failed to conquer high inflation, which has remained elevated since it peaked at 9.1% in June 2022, most recently coming in at 3.2% year-over-year in February. In response to high inflation, the Federal Reserve has placed its federal funds rate in a range of 5.25% and 5.50%, putting upward pressure on interest rates and raising the cost of credit across the economy.
“The number of full-time jobs has plummeted by more than 1.8 million since June 2023, as of February, while part-time positions soared by nearly 1.7 million as Americans are forced to take up multiple jobs to make ends meet. Americans with multiple jobs jumped by 376,000 in February year-over-year,” the report said.
Biden knows that the economy has killed his approval rating, which means he’s not in a good position to head into the general election against former President Donald Trump who is the presumptive nominee for the Republican Party. He’s so desperate to improve the polling data he’s fudging the job numbers. Let’s hope he gets busted.