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Nonfarm payrolls and employment levels, chart by Mish

Please consider the severely delayed September Jobs Report originally scheduled for October 3.

Initial 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 reported negative job growth for June.

The revision hit parade continues in September. July was revised down by 7,000, from +79,000 to +72,000, and the change for August was revised down by 26,000, from +22,000 to -4,000.

There is no reason to believe this report either. But let’s discuss it anyway.

2025 Synopsis

• Since January 2025, Employment (Household Survey) is -250,000.
• Since January 2025, Nonfarm Payrolls (Establishment Survey) is +573,000.
• Since January 2025, Fulltime Employment (Household Survey) is -743,000

Monthly Job Report Details

• Nonfarm Payroll: +119,000 to 159,626,000 – Establishment Survey
• Civilian Non-institutional Population: +225,000 to 274,226,000
• Civilian Labor Force: 470,000 to 171,248,000 – Household Survey
• Participation Rate: +0.1 to 62.4% – Household Survey
• Employment:+251,000 to 163,645,000 – Household Survey
• Unemployment: +219,000 to 7,603,000 – Household Survey
• Baseline Unemployment Rate: +0.1 to 4.4% – Household Survey
• Not in Labor Force: -245,000 to 102,978,000 – Household Survey
• U-6 unemployment: +0.1 to 8.0% – Household Survey

Nonfarm Payrolls Change by Sector

BLS will not publish the Current Employment Statistics Highlights document for the
September or October 2025 reference periods.

Monthly Change in Nonfarm Payrolls

BLS will not publish the Current Employment Statistics Highlights document for the
September or October 2025 reference periods.

Monthly Revisions

• The change in total nonfarm payroll employment for July was revised down by 7,000, from +79,000 to +72,000.
• The change for August was revised down by 26,000, from +22,000 to -4,000.
• With these revisions, employment in July and August combined is 33,000 lower than previously reported.

Part-Time Jobs

• Involuntary Part-Time Work: -170,000 to 4,579,000
• Voluntary Part-Time Work:-458,000 to 22,756,000
• Total Full-Time Work: +655,000 to 135,153,000
• Total Part-Time Work: -427,000 to 28,461,000
• Multiple Job Holders: +17,000 to 8,802,000

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.

Hours and Wages

This data is frequently revised.

• Average weekly hours of all private employees was flat 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 0.1 hours to 39.9 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 $0.09 to $36.67. A year ago the average wage was $35.33. That’s a gain of 3.8%.

Average hourly earnings of Production and Nonsupervisory Workers rose $0.08 to $31.53. A year ago the average wage was $30.38. That’s a gain of 3.8%.

Nonsense talk. The talking heads, Paul Krugman being one of them, claim wages are rising faster than prices. Their not if you properly factor in property insurance, property taxes, and food weighted properly.

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?

At 4.4 percent, this is the highest since the 4.5 percent reading for October 2021. And rounded to two decimal places, it’s 4.44 percent.

Alternative Measures of Unemployment

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

• The official unemployment rate is 4.4 percent.
• U-6 is much higher at 8.0 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.

Final Thoughts

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

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

Last month I noted June jobs are -13,000 from an originally-reported +147,000.

This month I note still more negative revisions.

Today, I add these comments: Not only is BLS sampling more than a bit questionable, but the birth-death model is proven garbage, and ICE raids are distorting immigrants’ ability and willingness to answer phone surveys by anyone working for the government.

The Labor Market Recap

• ADP: On November 6 I noted Private Employers Added 42,000 Jobs in October, First Increase Since July
• Revelio: On November 7, I noted Revelio’s Realistic Assessment of the US Labor Market and Jobs – Sinking Fast
• Challenger & Gray Layoffs: On November 6, I noted Cost Cutting Hits Jobs. October Layoffs Surge to Highest Level in 20 Years
• Richmond Fed: On November 6 I noted Richmond Fed Survey Shows Small Businesses Impacted More by Tariffs

ADP Pulse

Onn November 14, I noted ADP Pulse of Net Private Job Creation Drops to Negative 11,250 Per Week

How fast is the economy shedding jobs?

My assessment is fast. Especially small businesses that I believe are under-sampled.

Importantly, consider the pulse of -11,250 (-45,000) as a revised estimate of ADP’s +42,000 for October.

In light of the above, it is ludicrous to believe full-time employment rose by 655,000 in September. But that is what the BLS astonishingly reports!

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