The Jobs Report Is Worse Than You Think

Only 12,000 Jobs

Many have no doubt seen the headlines regarding the abysmal job growth reported by the Bureau of Labor Statistics (BLS) for the month of October. The BLS's favorite and "official" survey of the labor market, the so-called Establishment Survey, reported a total increase of only 12,000 jobs in October. This is the lowest monthly increase in employment in almost four years, which can only mean that the real job growth numbers are actually much worse.

For background, the BLS conducts two labor market surveys each month: the Establishment Survey (CES) and the Household Survey (CPS). The former is their favored survey because it frequently misrepresents actual labor market conditions and produces much higher levels of employment than its Household Survey counterpart. The reason for this is that the Establishment Survey only surveys the largest employers in the U.S. In other words, those businesses who are most immune to a general economic decline. The Household Survey, on the other hand, surveys actual people and asks them whether they're employed, where and in what capacity, and for how long (as well as many other questions).

The "official" numbers coming out of the Establishment Survey tout a mere 12,000 additional jobs created in the month of October while simultaneously omitting the fact that that "increase" in employment was driven entirely by an increase in government jobs. Without even looking at the much more reliable Household Survey, the Establishment Survey reports that private sector jobs decreased by 28,000, while government jobs increased by 40,000.

Additionally, the Establishment Survey reports that the manufacturing industry has continued to decline, losing roughly 46,000 jobs in October (see: The Real Wisconsin Economy for a detailed look at Wisconsin manufacturing). The weak, yet still positive spin of last month's jobs report indicates that government officials don't care where the jobs come from, so long as there's jobs to be had.

But by their nature, government jobs are unproductive and do nothing but divert labor and other resources away from the truly productive sector of the economy––the private sector. While few would ever admit it publicly, even FED and BLS economists know this, which is precisely the reason for their other survey––the Household Survey.

The Household Survey

Pound for pound, the Household Survey (HHS) is far superior to the Establishment Survey (ES). The HHS shows that the ES is not only incorrect in terms of magnitude but also in terms of direction. The ES reported that during one of the most precarious economic situations of our lifetime (high inflation, high Debt to GDP, bond market issues, inverted yield curves, CRE banking crises, etc.), that the U.S. economy has managed to not only keep up with and mitigate the deleterious effects plaguing the economy, but also to overcome them and produce positive job growth. Bogus.

The graph above shows that not only was there no job growth, but that there were actually massive job losses in October. Even if the ES was correct, 12,000 new jobs isn't even enough to account for the U.S.'s population growth––that requires at least 100,000 new jobs.

The HHS shows that in October there were 368,000 fewer jobs than there were in September––even more than were lost in October of last year. Going back to February 2023, the ES has failed to show job losses in 7 of the last 21 months, and has over-reported job gains a total of 13 times.

What's more, the HHS shows that the number of people in the labor force decreased by 220,000, while the number of people who dropped out of the labor force entirely increased by 440,000.

Whoever the next president might be, they're in for a rough ride––but no rougher than the American people who have been living under the failed policies of administrations intent upon destroying the American standard of living.