Experts are urging greater skepticism over jubilant claims about the January jobs report now that they’ve had time to go over the data, noting that routine annual technical changes are being misunderstood. They note that the jobs report should be taken with a grain of salt.
“The household survey, which has done a better job tracking jobs of late, was weak. Removing population revisions, job growth actually fell by 272,000 and the number of unemployed rose by 135,000. This is much more in line with [Wall] Street forecasts for a muted gain or even a decline.”
“The Labor Department reported Friday that the U.S. participation rate was 62.2 percent in January compared with 61.9 percent in December. However, the increase was due to new population estimates introduced in January. If they had been applied to December, participation wouldn’t have changed.”
Brian Wesbury, First Trust Advisers:
“…The great civilian employment number – roughly 1.2 million jobs – was also due to a quirk. Every January, the Labor Department inserts new Census data on the size of the US population, which affects the numbers on the labor force and employment. That population adjustment was responsible for all the increase in civilian employment in January; without that quirk, the BLS would have reported a 272,000 drop in civilian employment and a 137,000 decline in the labor force.”
“All of the January labor force rise was due to new population controls. Without that, [labor force] likely would have shrunk – [around] 200K. The participation rate wouldn’t have changed. Net [labor force] change since Feb, 2020 wouldn’t have changed much since without population controls, [labor force] then is likely undercounted.”