The U.S. added a surprisingly large 2.7 million new jobs in 2023 as the economy defied a widely forecasted recession, but monthly increases were exaggerated by pandemic-era distortions in how they are counted. Make no mistake. The U.S. labor market is historically strong. Good workers are hard to find and companies have to pay more to attract and keep them. The unemployment rate sits at a very low 3.7%.
Yet the official U.S. employment reports chronically overstated how many jobs were created each month in 2023, potentially misleading Wall Street, the Federal Reserve and Washington lawmakers about the true strength of the economy. From January to October, the government initially overestimated job growth in nine of the 10 months. Eventually the employment gains were reduced by an average of 55,000 a month, an unusually large change. Take last June as an extreme example. The government initially said a robust 209,000 new jobs were created before marking its finally estimate down to a tepid 105,000 two months later. At the time, the stronger-than-expected report may have kept the Federal Reserve primed to keep raising interest rates amid worries that a hot labor market was keeping too much upward pressure on inflation. What’s going on? Some economists blame the low level of response by businesses surveyed by the Bureau of Labor Statistics to determine how many jobs are created each month. “Low response rates to the BLS’s monthly esta …
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Yet the official U.S. employment reports chronically overstated how many jobs were created each month in 2023, potentially misleading Wall Street, the Federal Reserve and Washington lawmakers about the true strength of the economy. From January to October, the government initially overestimated job growth in nine of the 10 months. Eventually the employment gains were reduced by an average of 55,000 a month, an unusually large change. Take last June as an extreme example. The government initially said a robust 209,000 new jobs were created before marking its finally estimate down to a tepid 105,000 two months later. At the time, the stronger-than-expected report may have kept the Federal Reserve primed to keep raising interest rates amid worries that a hot labor market was keeping too much upward pressure on inflation. What’s going on? Some economists blame the low level of response by businesses surveyed by the Bureau of Labor Statistics to determine how many jobs are created each month. “Low response rates to the BLS’s monthly esta …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]