by Rick Manning
“JOB GROWTH REDUCED BY 501,000,” reported Drudge, linking to a Marketwatch report that was headlined, “U.S. created 500,000 fewer jobs since 2018 than previously reported, new figures show.”
But these headlines are quite misleading. It’s fake news.
Overall, the economy created 2.2 million jobs in 2018 if you look at the household survey, which matches any new estimate in the establishment survey that might be derived from routine benchmark adjustments by the Bureau of Labor Statistics to population estimates.
The unemployment data we get every month is based on two surveys, one of households and the other of businesses, to determine who is working and where they are working. As part of those surveys, the Bureau of Labor Statistics annually revises their datasets based on more complete information that comes in later.
This is a part of the normal comings and goings of the agency, and it is irresponsible for Marketwatch and Drudge to ring alarm bells when they should know better. These survey revisions do not change whether people have jobs or where they have jobs in the aggregate, it changes the assumptions that are made in the survey, and they certainly do not show job losses.
It is normal for the Bureau of Labor Statistics’ to revise the benchmarks for the non-seasonally adjusted establishment employment survey, modifying the assumed population levels from the initial survey, which then gets finalized the following year and the data smoothed out across the dataset into its reported seasonally adjusted form.
For example, for the March 2018 revision, the preliminary estimate showed the establishment survey had 43,000 more jobs than initially reported, but by the time the survey was finalized, it ended up showing 16,000 fewer jobs than initially reported.
The worst scenario from these standard revisions, assuming the preliminary estimate holds, would be to simply bring the establishment survey more in line with the household survey, both which are really, really good, showing the Trump economy has produced about 5.2 million jobs since Jan. 2017 instead of the 5.7 million initially reported in the establishment survey. Instead of producing 223,000 jobs a month in 2018, it might have instead produced 185,000, but we’ll find out for sure in February when the final number is posted.
Overall, the economy created 2.2 million jobs in 2018 if you look at the household survey, which matches the new estimate in the establishment survey.
That doesn’t mean we lost any jobs and Marketwatch and Drudge’s click-bait headlines to the contrary do their readers’ a disservice.
In fact, 2018 produced the strongest economic growth reported since 2005, and unemployment seen during the Trump administration is the lowest it has been in the past 50 years, and pending a reversal, those are the numbers the American people will be considering as the 2020 presidential cycle nears.
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Rick Manning is the President of Americans for Limited Government.