While the prevailing post-payrolls narrative has focused on the divergence between the stronger than expected (if soon to be revised lower) headline payrolls print (which at 187K came in just above expectations of 170K but followed two sharply downward revised months) and the unexpected spike in the unemployment rate from 3.5% to 3.8%, the highest since Feb 2022, a closer look at the details of today's jobs report reveals just how ugly the reality behind the the Budget-Busting Bidenomics truly is.
Let's start with revisions.
Regular readers are aware that earlier this year we spotted a peculiar trend when it comes to economic data releases by the Biden admin which - without fail - had been revised lower...
US jobless claims mysteriously surge upon "data" revision— zerohedge (@zerohedge) June 8, 2023
US jobs mysteriously revised sharply lower upon "data" revision
Europe mysteriously enters recession upon "data" revision
Take a wild guess in which direction the May 339K NFP print was revised— zerohedge (@zerohedge) July 7, 2023
Payrolls for every month in 2023 have been revised lower. pic.twitter.com/VwfUvBJnCe— zerohedge (@zerohedge) July 7, 2023
Give up?— zerohedge (@zerohedge) September 1, 2023
Ok July payrolls revised down from 187K to 157K, meaning EVERY SINGLE MONTH in 2023 has been reviser lower by the Biden Department of goalseeking high numbers and then revising them lower when nobody cares anymore
... and this month was no different. In fact, as shown in the chart below, the jobs print from every single month has been revised lower! Why? So that the White House can take credit for a strong number (one which also sparks algorithmic buying in the market) only to quietly revise it lower one and two months later when nobody is looking to ease the glideslope for the coming recession.
But that's just the start. Next we turn to the numbers behind the headline job prints which were actually not that terrible: the monthly nonfarm payrolls (from the Establishment Survey( may have been weak at 187K but the far more accurate Household Survey showed that the number of Employed workers actually increased by 268K to 161.3 million, the second month in a row the Household Survey bested the Establishment.
So far so good. There are just two problems with this number. First, the Birth-Death (B-D) model, which is integrated into the BLS' Current Employment Statistics (CES) release, which contains the NFPs and which serves as one of the core "tweak" layers which the BLS uses to adjust the actual, raw underlying jobs number and goalseek a desired jobs number. It will not come as a surprise to many that in August, the Birth Death adjustment saw the fifth consecutive upward boost in a row, and at 103K, it followed the second highest contribution of 2023 when July B-D added 280K. In other words, more than half of all job "gains" were again the result of the BLS assuming that newly "birthed" "businesses created at least 103K new jobs, a number which is not based at all on observable facts but is a regression to some historical trendline which only the BLS is privy to.
Unfortunately, it gets much worse, because while the Establishment Survey only looks at jobs quantitatively, the Household Survey (which again was stronger this month) also looks at the quality of jobs gained or lost, and specifically it breaks down the jobs into full-time and part-time jobs (Source: Table A-9).
Well, one look at this month's adjustment and it's literally a shocker: you will not hear anyone from the Biden admin or associated economist cheerleaders mention this, but the BLS reported that in August the number of full-time jobs dropped again, sliding by 85K to 134.2 million, and followed the whopping 585K plunge in July which brings the two-month total drop in full-time jobs to a whopping 670K, the biggest 2-month plunge since the covid lockdowns in early 2020 when 12.5 million full-time jobs were lost in one month!
But if full-time jobs crashed how did the BLS get an increase of 222,000 employed workers? Simple: it was all in the latest jump of part-time workers. Indeed, in August the number of reported part-timers jumped by 32K and when added to the near-record 972K surge in July, the 2-month total was just over one million - 1,004,000 to be precise - to 27.185 million.
Going back to a quantitative read of the data, we look at the number of multiple jobholders - those workers who have to work more than one job at a time to make ends meet. In August this number was actually a modest silver lining, as it dropped by July, that number dropped by 85K to 8.028 million, but it remains just shy of the pre-covid record.
But wait, there's more: as we noted last night, the August payroll is a made-up number almost entirely driven by the Seasonal Adjustments, and as SouthBay Research notes, in August, the Seasonal Adjustment created 159K of the 179K Private Payroll growth. 90% of the total.
Meanwhile, as SouthBay notes, it has been 6 months since the government formally ended COVID shelter-in-place. Yet the Payroll model mechanics continue to behave as if special treatment is needed. Indeed, this has been reflected all year in the absurdly bullish Seasonal Adjustments. As shown in the next chart, the un-distorted data (the non seasonally adjusted data) paints a very concerning picture of weak hiring.
In short, unadjusted hiring was the second worst since the Great Recession in 2009!
As SouthBay summarizes it, "Hiring is at a standstill.... to suggest that the labor market is strong is not supported by the actual data."
Putting it all together, if one believes the headlines, in August the US added 187K jobs, and the number of employed workers rose by 222K. However, taking a closer look at the adjustments applied to the actual data, and its composition, we find not only that the unadjusted increase was just 20K jobs, or the worst August since the global financial crisis, but that in August, the number of well-paid, full-time workers actually dropped by 85K, offset by a 32K rise in part-time workers.
Adding to the striking July moves, we get a 670K drop in full-time workers in the past months, offset by a 1,004K jump in part-time workers. No wonder then that multiple-jobholders are just shy of all time highs, who have discovered that to keep up with the economic miracle that is "Brandonomics" they need to work (far) more than just one job.
In short: August was another dismal month for the jobs market, which is why we expect the usual theater: non-stop spin and lies from the Biden admin, and not a single relevant question from the liberal media whose job is not to educate or inform, but to carry water, spread lies and enable propaganda.