Recent revisions in labor market data have sparked discussions, with many analysts suggesting the changes paint an overly optimistic picture of current employment trends. Despite these revisions, skepticism remains regarding the true state of the job market.
Initially, data indicated an average of 606,000 new jobs per month in 2021, slightly adjusting to 604,000 following revisions, exhibiting consistency over the year. However, 2022’s figures witnessed a decrease from an average of 399,000 to 377,000 new jobs each month. These changes lead to an apparent strengthening in 2023, with monthly additions rising from 225,000 to 255,000.
The belief is that these modifications are significantly influenced by seasonal adjustments made by the Bureau of Labor Statistics (BLS), which some critics have labeled as overly generous. When comparing the revised BLS payroll numbers with those from ADP—a private payroll company considered by many to be more precise due to its direct access to company employment data—a diverging pattern emerges. While BLS figures suggest a rising trend in job numbers, ADP’s records indicate a marked deceleration.
Furthermore, while official BLS reports show record highs in payroll numbers each month since December 2020, the actual level of employment has shown little to no increase over the past year. To illustrate, a staggering disparity has risen between official payrolls and the actual employed population; to align the two, an additional 9 million people would need to be working.
Shifts in job type also cast light on the complexity of employment changes. Reviewing the job composition reveals a stark contrast. For example, in January 2024, the BLS reported 133.1 million full-time positions and 27.9 million part-time positions in the U.S. This might seem promising until one realizes that in February 2023, there were actually 133.2 million full-time jobs—suggesting a reduction over the year. Additionally, the growth in employment over this period is attributed entirely to an increase in part-time jobs, totaling approximately 870,000.
This analysis calls attention to the intricate nature of the labor market and the importance of adopting a comprehensive approach to understanding employment trends. It’s essential for the public to consider both the quantitative data provided by government agencies and the qualitative aspects of employment to gain a realistic view of the U.S. labor market’s health.