The July jobs report was so brutal that somebody got fired. It was not so much that the headline reading was horrific – it was not that great – but rather the revisions that captured everyone’s attention. The US economy has been humming along amid tariff-driven uncertainty, with tepid inflation numbers, a low unemployment rate, and growth prospects rebounding. But last month’s employment numbers shattered the hopes and dreams of Trumponomics 2.0. At least until the next non-farm payrolls data.
July Jobs Report Disappoints
According to the Bureau of Labor Statistics, the US economy added 73,000 new jobs, far short of the consensus estimate of 110,000. The unemployment rate rose to 4.2% from 4.1%, in line with economists' expectations. Average hourly earnings rose 0.3% monthly and edged up to 3.9% year over year. The labor force participation rate dipped to 62.2%, while average weekly hours rose to 34.3.
Two industries accounted for all of the job gains: health care (55,000) and social assistance (18,000). While these are classified as private sector positions – private payrolls swelled by a smaller-than-expected 83,000 following a tepid 3,000 jump in June – a better description is government-adjacent. Meanwhile, government and manufacturing jobs fell by 10,000 and 11,000, respectively.
The household portion of the July jobs report, which eliminates duplication, revealed that employment declined by 260,000. In addition, the number of long-term unemployed persons increased by 179,000 to 1.8 million, representing 25% of all jobless individuals. The number of employed full-time workers declined by 440,000, while the number of part-time workers employed surged by 247,000.
The one positive aspect of the latest labor market snapshot is that the divergence between employed US- and foreign-born workers continues to narrow. Jobs for US-born workers have soared by almost 2.5 million since the start of the year. By comparison, they have fallen by 1.01 million for foreign-born workers.
But the good news stops there because the next set of numbers will not be for the faint of heart.
Oh, There Will Be Revisions
As Liberty Nation News has reported in the past, the federal agency has had a long-standing problem with revisions. For example, following the Labor Department's annual benchmark revisions, it was discovered that US job creation was 818,000 lower than initially reported in the 12 months ending in March 2024. In the first six months of 2024, revisions totaled almost 600,000.
The July jobs report revived the revision problem that had been plaguing the Bureau of Labor Statistics for several years. Officials noted that May’s payroll increase was adjusted downward by 125,000 to 19,000, and June’s employment gains were revised lower by 133,000 to 14,000. After crunching the numbers and carrying the one, this means the US government overstated job growth by 258,000 in two months, bringing the year-to-date total to 461,000. Due to these revisions, the three-month average is now a paltry 33,000.
What happened? First, the bureau acknowledges that revisions are expected because of data collection. However, it admitted that the changes “were larger than normal.” Second, several theories have been proposed to explain why it consistently gets the data wrong, including a lack of resources, inadequate data gathering methods, poor response rates, and political motivations.
That last one – political motivations – prompted President Donald Trump to fire the head of the Bureau of Labor Statistics, Erika McEntarfer. In a Truth Social post shortly after the latest employment figures, Trump confirmed he was directing officials to terminate her, accusing the commissioner of manipulating the numbers and faking the jobs data. Here is what he wrote on his social media platform:
"I was just informed that our Country’s ‘Jobs Numbers’ are being produced by a Biden Appointee, Dr. Erika McEntarfer, the Commissioner of Labor Statistics, who faked the Jobs Numbers before the Election to try and boost Kamala’s chances of Victory.
"I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified. Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes."
Is it a poor economy, or is the Bureau of Labor Statistics to blame? This will be the summer debate in Washington.
Grab the Popcorn
August data, which will be released after the Labor Day holiday, will undoubtedly require a breakfast of popcorn. Will the report issue more revisions? Will it be a gangbuster reading? Will Wall Street and the Federal Reserve take it with a grain of salt? Nobody knows. If the last few years are anything to go by, it is clear that the coronavirus pandemic broke the statistics, making conventional metrics unreliable. To paraphrase Leo Tolstoy, the only absolute knowledge attainable by man is that the data is meaningless.
