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Nonfarm payrolls and employment levels, chart by Mish

Initial Jobs Report Thoughts

All year, I kept asking “Does anyone believe these reports?”

In July the BLS said oops. Employment in May and June was a combined 258,000 lower than previously reported (now revised lower again).

In August, the BLS said oops again. The BLS now reports negative job growth for June.

Manufacturing shed another 12,000 jobs. Down 78,000 from a year ago.

2025 Synopsis

• Since January 2025, Employment (Household Survey) is -501,000.
• Since January 2025, Nonfarm Payrolls (Establishment Survey) is +487,000.
• Since January 2025, Fulltime Employment (Household Survey) is -1,416,000

Monthly Job Report Details

• Nonfarm Payroll: +22,000 to 159,540,000 – Establishment Survey
• Civilian Non-institutional Population: +216,000 to 274,001,000
• Civilian Labor Force: 436,000 to 170,778,000 – Household Survey
• Participation Rate: +0.1 to 62.3% – Household Survey
• Employment:+288,000 to 163,394,000 – Household Survey
• Unemployment: +148,000 to 7,384,000 – Household Survey
• Baseline Unemployment Rate: +0.1 to 4.3% – Household Survey
• Not in Labor Force: -220,000 to 103,443,000 – Household Survey
• U-6 unemployment: +0.2 to 8.1% – Household Survey

Nonfarm Payrolls Change by Sector

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There were 9 declining sectors in August with only 5 increasing.

Manufacturing, construction, wholesale trade, and professional services were disasters.

Manufacturing was hardly unexpected given declining backlog of orders in the ISM reports.

Health Services, and Leisure and Hospitality were the bright spots.

Monthly Change in Nonfarm Payrolls

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Expect negative benchmark revisions for November 2024 through April 2025.

This data will be available on September 9.

Monthly Revisions

• The change in total nonfarm payroll employment for June was revised down by 27,000, from +14,000 to -13,000.
• The change for July was revised up by 6,000, from +73,000 to +79,000.
• With these revisions, employment in June and July combined is 21,000 lower than previously reported.

Recall that last month the BLS revised June from +147,000 to +14,000. Now it’s -13,000.

Part-Time Jobs

• Involuntary Part-Time Work: +85,000 to 4,769,000
• Voluntary Part-Time Work:+528,000 to 23,298,000
• Total Full-Time Work: -357,000 to 134,480,000
• Total Part-Time Work: +597,000 to 29,034,000
• Multiple Job Holders: +443,000 to 8,785,000

The above numbers never total correctly due to the way the BLS makes seasonal adjustments. I list them as reported.

Note that multiple job holders add to nonfarm payrolls but not the number of employed.

Last month full time work dropped by 440,000. This month it’s another 357,000 decline. Wow.

Hours and Wages

This data is frequently revised.

• Average weekly hours of all private employees was flat (revised down by 0.1) at 34.2 hours.
• Average weekly hours of all private service-providing employees was flat at 33.2 hours.
• Average weekly hours of manufacturers fell 0.2 hours to 40.0 hours.

An overall decline or rise of a tenth of an hour does not sound line much, but with employment over 160 million, it’s more significant than it appears at first glance.

In a falling employment setup, hours of the remaining employees tend to rise, at least initially.

Hourly Earnings

This data is also frequently revised. Here are the numbers as reported this month.

Average Hourly Earnings of All Nonfarm Workers rose $0.10 to $36.53. A year ago the average wage was $35.23. That’s a gain of 3.7%.

Average hourly earnings of Production and Nonsupervisory Workers rose $0.12 to $31.46. A year ago the average wage was $30.27. That’s a gain of 3.9%.

Unemployment Rate

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Unemployment rate seasonally adjusted, data from BLS, chart by Mish

Through July, the Unemployment Rate has been between 4.0 percent and 4.2 percent for 15 straight months.

That ended in August.

Do we credit Biden, Trump, the Fed, or the BLS?

Alternative Measures of Unemployment

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Table A-15 is where one can find a better approximation of what the unemployment rate really is.

• The official unemployment rate is 4.3 percent.
• U-6 is much higher at 8.1 percent.

Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Some of those dropping out of the labor force retired because they wanted to retire. Some dropped out over Covid fears and never returned. Still others took advantage of a strong stock market and retired early.

The rest is disability fraud, forced retirement (need for Social Security income), and discouraged workers.

Birth Death Model

Starting January 2014, I dropped the Birth/Death Model charts from this report.

The birth-death model pertains to the birth and death of corporations not individuals except by implication.

For those who follow the numbers, I retain this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid.

Birth-Death Methodology Explained

I gave a detailed explanation of the model and why the usual calculation is wrong in my June 8, 2024 post How Much Did the BLS Birth-Death Adjustment Pad the May Jobs Report?

I repeat, do not subtract the birth-death number from the headline number.

Household Survey vs. Payroll Survey

• The payroll survey (sometimes called the establishment survey) is the headline jobs number. It is based on employer reporting.
• The household survey is a phone survey conducted by the BLS. It measures employment, unemployment and other factors.

If you work one hour, you are employed. If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force.

Looking for job openings on Jooble or Monster or in the want ads does not count as “looking for a job”. You need an actual interview or send out a resume.

These distortions artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.

The BLS payroll reports smack of oversampling large employers and undersampling small employers where jobs have been trending lower.

QCEW Report Shows Overstatement of Jobs

On June 16, I commented QCEW Report Shows Overstatement of Jobs by the BLS is Increasing

The discrepancy between QCEW and the BLS jobs report is rising.

We will have a QCEW update next week to review. It will be for the first quarter of 2025.

Final Thoughts

Two months ago I said “The BLS monthly data is total garbage. I do the best I can with BLS data.”

Last month, I said the stench is so powerful that no one can pretend there is not a massive data collection, sampling problem at the BLS.

This month we see June jobs are -13,000 from an originally-reported +147,000.

If you are looking for a bright spot, Household Survey employment rose in August by a reported 288,000. Yeah, right.

Related Posts

September 4, 2025: Year-Over-Year Small Business Employment Growth Barely Above Zero

ADP reports the total YOY small business growth as +19,000.

The Unemployment Level Is Now Greater than Job Openings

On September 3, I noted The Unemployment Level Is Now Greater than Job Openings

For the first time since the pandemic unemployment is above openings.

The nonfarm payroll response rate is 42.6 percent with the same issues as with JOLTS

Expect more negative revisions. Recession anyone?

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