Influential economist EJ Antoni recently raised the bar with a provocative proposal. In response, he instructed the Bureau of Labor Statistics (BLS) to halt its monthly jobs report until the needed corrections are made. That’s not what the BLS’s most recent July report, released Friday, shows. It showed historically big down revisions for job counts in May and June, leading to this recommendation.
The July report showed significant alterations to previous job figures, particularly revising the June total from an initial estimate of 147,000 jobs down to 14,000 jobs. This is a staggering adjustment of 133,000. Only the May jobs total was revised materially. It has fallen by 120,000 jobs from an original estimate of 139,000 down to a paltry 19,000, a mere bagatelle. These changes have led employers and economists alike to question the reliability of the monthly data that the BLS releases before the monthly employment situation report.
Antoni stressed the need for a baseline—an accurate snapshot of what is happening now—for decision-makers in both the public and private sectors. “Major decision-makers from Wall Street to D.C. rely on these numbers, and a lack of confidence in the data has far-reaching consequences,” he stated. His recent call to suspend the monthly reports shows an increasing concern about the reliability of the BLS’s job estimates.
Though the last fix was truly historic, they are not unique in history. Since 2003, the average upward monthly revision has been about 51,000 jobs. The historical average jobs creation number is a bit higher – between 1979 and 2003 the average was actually an increase of 61,000 jobs. Monthly revisions tracked by the BLS since 1979. Responding to these issues, in 2003, they developed a new probability-based sample design to increase statistical precision.
The Bureau’s revisions for June and May have caused significant controversy among economists and policymakers. The June report’s final count reflected a substantial decrease, leading some to question the methodology and reliability of the initial estimates. Antoni’s recommendation for a temporary halt to monthly reports aims to ensure that only the most accurate data is disseminated.
“Until it is corrected, the BLS should suspend issuing the monthly job reports but keep publishing the more accurate, though less timely, quarterly data.” – EJ Antoni
As debates about these amendments move forward, advocates and impacted communities are still forced to contend with the fallout from sketchy and sometimes made up job numbers. As a result, the BLS’s data is extremely influential in informing overall economic policy and almost every market strategy. That’s why it’s so important to get them right – to maximize transparency and maintain the public’s trust in the organizations on which they rely for this life-saving information.