While the prevailing post-payrolls narrative has focused on the divergence between the soggy headline payrolls print (which at 187K not only missed expectations for a second consecutive month, but was the lowest number since Dec 2020), and the stronger than expected hourly earnings (which beat expectations only because hours worked dropped again to 34.3, a level last seen in the pre-covid days) and the drop in unemployment rate (which brings us even further from the Fed's year-end dot plot target of 4.1%, 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
... 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.
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 July, the Birth Death adjustment hit the second highest of 2023 at 280K. In other words, most if not all job "gains" were as a result of the BLS assuming that newly "birthed" "businesses created at least 280K 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 July the number of full-time jobs plunged by 585,000 to 134.274 million, the biggest monthly drop since record covid crash of 14.7 million jobs!
But if full-time jobs crashed how did the BLS get an increase of almost 300,000 employed workers? Simple: it was all in the surge of part-time workers. In July, the number of part-timers exploded by almost one million - 972K to be precise - to 27.153 million.
Finally, 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 July, that number surged by 118K, and at 8.113 million was just shy of the pre-covid record hit in July 2019.
Putting it all together, if one believes the headlines, in July the US added 187K payrolls, and the number of employed workers rose by 268K. However, taking a closer look at the composition we find that in July, the number of well-paid, full-time workers collapsed by a near record 585K, offset by a 972K surge in part-time workers. As for the balance, it was the 118K people who discovered last month that to keep up with the economic miracle that is bidenomics, they need to work at least one more job.
In short: July was a catastrophic 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.