Was a few of final 12 months’s job-market power “overstated”?

Right here’s a enjoyable query to dig into forward of Friday’s US jobs report: did BLS estimates overstate labour-market progress within the second quarter of 2022?

A number of information factors present as a lot, in response to a Thursday presentation from Barclays. The economists discovered a attainable overstatement of about 440,000 jobs. In contrast towards the official US estimate of simply over 1mn jobs, that appears, uh, important.

However Barclays says that’s much less dire an image than a few different stories out not too long ago:

1) Final week’s report on Business Employment Dynamics, or BDM, estimates {that a} internet 287,000 jobs have been misplaced within the second quarter, seasonally adjusted.

2) The Philly Fed’s early benchmark revisions of state payroll employment, revealed in December, says that simply 10,500 internet new jobs have been created that quarter, on a seasonally adjusted foundation.

So, relying on who you take heed to, US private-sector jobs have been both created, destroyed, or basically unchanged within the second quarter of final 12 months.

To provide you with their estimate of the BLS’s overstatement of 440k, Barclays’ economists go the supply of each the Philly Fed and BDM information, the BLS’s Quarterly Census of Employment and Wages, or QCEW. (They guess that each the Philly Fed and BDM stories utilized wonky seasonal changes.)

The QCEW report may be very dependable, Barclays says. “Since almost all employers are required to take part in UI, that is shut to a whole Census depend, overlaying about 97 per cent of total workers,” the economists write of their presentation.

QCEW information is used to benchmark the general degree of NFP payrolls initially of every 12 months.

Tomorrow’s report (on January jobs creation) will due to this fact be benchmarked to the QCEW’s numbers from 1Q22. And since the BLS solely benchmarks its annual payroll numbers to the prior March, the 2Q job-creation figures gained’t be revised to extra correct ranges till subsequent 12 months.

To thrust back any political commentary: it is a bit area of interest to be a plot from the “Chicago guys”, but it surely’s fascinating nonetheless! Stats-heads might discover extra notable element within the full presentation.

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