Jobs: Last Three Months Saw Downward Revisions of 57k on Average

The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the Headline Report, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.

Current Trends

The jobs report was a modest gain of 177k but it way outpaced estimates which was enough to juice the stock market, leading to the 9th positive gain in a row for the S&P.

The Household report, which had been underperforming the headline number for some time, came in higher. This is the second month in a row, but only because last month Headline report was revised down.

Figure: 1 Primary Report vs Household Survey – Monthly

For the year, the Household Survey is significantly higher due to the data anomaly in January.

Figure: 2 Primary Report vs Household Survey – Annual

Switching to the headline report…

The BLS publishes the data behind their Birth/Death assumptions (formation of new business). In April, there was a major increase in the assumed jobs created. In fact, it was the biggest increase attributable to the birth/death assumptions going back at least a year. Just to ask the obvious question – is it a little strange that in the most volatile month for the stock market in years with extreme levels of uncertainty, there was the greatest jobs created due to new businesses? Suspicious for sure!

Figure: 3 Primary Unadjusted Report with Birth Death Assumptions – Monthly

For the year, the birth death is positive against a negative number for actuals.

Figure: 4 Primary Unadjusted Report with Birth Death Assumptions – Monthly

Digging Into the Headline Report

The 177k jobs number was accompanied by a flat unemployment rate at 4.2%.

Figure: 5 Change by sector

Jobs by Category

When looking over the last 12-month trend, this month was mostly above trend. Furthermore, it is above trend in all the “right” categories and below trend mainly in Government (DOGE cuts).

Figure: 6 Current vs TTM

The table below shows a detailed breakdown of the numbers. The table also shows that the Government numbers were negative at the federal level and positive and a state and local level.

Figure: 7 Labor Market Detail

Revisions

The chart below shows how the jobs data has been revised. So far, every month this year has been revised lower by a significant margin.

Figure: 8 Revisions

Over the last twelve months, jobs have been revised down by about 29.9k per month and revised lower by 52.7k over the last three months!

Figure: 9 Revisions

More Detail in the Household Survey

Another level of detail in the Household report shows full-time vs part-time job holders. This month shows that most new jobs added were full-time jobs.

Figure: 10 Full Time vs Part Time

Historical Perspective

The chart below shows data going back to 1955.

Figure: 11 Historical Labor Market

The labor force participation rate is still well below the highs before the Global Financial Crisis. This month it increased slightly to 62.6%.

Figure: 12 Labor Market Distribution

Conclusion

The jobs report was decent. It’s good to see the drop in Government employment. Unfortunately, there are still two very suspicious data points in the report: the birth/death assumptions and the massive revisions down over the last three months.