Conspiracy theories have always surrounded strong jobs numbers. But what happens when the data falls short?
New York
CNN
—
For months, many Republicans, including former President Donald Trump, have been quick to assert, without proof, that subsequent downward revisions to initial employment estimates published by the Bureau of Labor Statistics were intentional in order to mask the true state of the economy at the time and help bolster Democrats' case to voters.
If that were the case, why would the BLS produce an initial estimate that employers hired just 114,000 new workers in July, the second-lowest monthly gain since December 2020? That report, which also resulted in the unemployment rate shooting to 4.3%, the highest level since October 2021, sparked concerns of a pending recession and helped contribute to a significant stock market selloff. (The July number was later revised higher to 144,000.)
But they may ditch their argument Friday morning, when the October jobs report is set to be released, just days before Election Day. That's because the report could show monthly job growth was the most sluggish since employers laid off a net 253,000 workers in December 2020 due in part to the effects of Hurricanes Helene and Milton, which have temporarily prevented some people from working.
However, if it's anything like Wednesday's private sector hiring report published by payroll processor ADP, which showed employers added 233,000 jobs in October versus the 108,000 economists anticipated, it could reignite false accusations that the report is biased.
A hiring sign is displayed in front of a store at the Tysons Corner Center mall in Alexandria, Virginia, on August 22, 2024.
Anna Rose Layden/Getty Images/File
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For instance, after the BLS reported employers hired an estimated 254,000 new workers last month, similarly blowing past economists' expectations, Republican Sen. Marco Rubio from Florida posted on X that it was "another fake jobs report." His claim rested on the fact that the BLS had recently revised down several initial estimates of the number of new hires each month.
"All the fake numbers in the world aren't going to fool people dealing with the Biden-Harris economic disaster every day," Rubio, who has been campaigning for Trump, added in the post. A Rubio representative did not comment.
Such claims are "groundless," said Erica Groshen, a former BLS commissioner who is a senior economics adviser at the Cornell University School of Industrial and Labor Relations. "There really isn't room for someone fudging the numbers. These are dedicated data nerds who could be making much more money elsewhere, who just really believe in the integrity of the data and that is baked in to what they do."
In fact, the BLS, which is housed under the Department of Labor, and other federal units such as the Census Bureau and the Bureau of Economic Analysis are required to "function in an environment that is clearly separate and autonomous from the other administrative, regulatory, law enforcement, or policy-making activities within their respective Departments," per an Office of Management and Budget directive.
Data the BLS publishes is "collected, tabulated, and analyzed by expert career civil servants, which has been the BLS practice since 1915," a DOL spokesperson told CNN in an emailed statement. "Data are then made available to the public to ensure that business, economic, and policy leaders have critical and timely economic data to inform necessary decision-making. As required by law, BLS produces objective statistics that are accurate and unbiased."
Nevertheless, shortly after the BLS released its annual preliminary benchmark review of employment data in August, which suggested there were 818,000 fewer jobs in March of this year than were initially reported, the largest such revision in 15 years, Trump said in a post on Truth Social it was a "MASSIVE SCANDAL!"
"The Harris-Biden Administration has been caught fraudulently manipulating Job Statistics to hide the true extent of the Economic Ruin they have inflicted upon America," he said.
These annual revisions occur as the BLS reconciles the survey data it collected to arrive at the initial monthly estimates, which are also subjected to two prior revisions that get released in the next two month's reports, with the actual data it subsequently receives from quarterly tax reports submitted by businesses to their states.
For instance, when Trump was in office, the BLS estimated 514,000 fewer jobs were added in March 2019 compared to what was previously reported.
Karoline Leavitt, the national press secretary for Trump's campaign, told CNN in an emailed statement Vice President Kamala Harris "lied about creating 818,000 jobs."
A data headache
The BLS puts out the best possible estimate it can make with the information it has available at any given point in time. But that task has become a lot more taxing over the past few years.
Pandemic-related effects tested the methodologies the BLS relies on to estimate the number of people who should be counted as employed or unemployed. To complicate matters further, response rates to the household and business surveys that monthly job reports are based on declined significantly when the pandemic began and have yet to return to pre-pandemic levels, according to BLS response rate data.
Laura Kelter, national estimates branch chief within the division of Current Employment Statistics at the BLS, previously told CNN the agency has struggled more with recruiting survey participants, which helps explain the declining response rates. However, it isn't causing larger revisions between initial and final employment estimates, she said. (A DOL spokesperson told CNN her prior statement still holds.)
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Groshen disagreed, saying that initial estimates of the monthly change in hiring are "noisier than they used to be" because of the lower response. However, that gets smoothed out in later revisions as response rates improve with the additional time.
The declining response rates make it more costly for the BLS to reach survey participants who require extra nudges to respond. That exacerbates the funding shortfall at the BLS, where inflation-adjusted funding has steadily declined over the past decade, she said.
Ideally, the BLS would switch to a more modern approach that involves conducting the surveys online as opposed to over the phone or in person but the conversion isn't feasible without more funding, she said.
That would help improve, for instance, Federal Reserve officials' ability to make interest rate decisions that hinge on the latest labor market data, Groshen told CNN.
The attention that the BLS' labor market data has garnered "is a testament to how fundamental this information is and how we neglect it at our peril because when the information is worse, the decisions based on it are not going to be as good either."
