The Federal Reserve Chair, Powell, expressed concerns about the accuracy of recent job creation figures. The Bureau of Labor Statistics (BLS) relies on a statistical model to estimate job gains and losses, which has, in recent years, led to overestimations that are later revised. This issue is further complicated by the political response to job reports, with the Trump administration having previously reacted negatively to unfavorable data. There is concern the administration might pressure the BLS to produce more favorable numbers.
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A recent Labor Department report revealed that the labor market created significantly fewer jobs than initially reported, with revisions showing a decrease of 911,000 jobs from the prior year. These downward revisions, the largest since 2002 and more than 50% higher than the previous year’s, indicated a weakening employment picture across various sectors, including leisure and hospitality, and professional and business services. The adjustments, based on quarterly census data, have sparked concerns about the economy’s health and have drawn criticism of the Bureau of Labor Statistics’ (BLS) data collection methods, leading to calls for new leadership. The White House has cited these revisions as evidence of economic struggles and increased pressure on the Federal Reserve to lower interest rates.
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The Bureau of Labor Statistics (BLS) released August jobs numbers indicating a disappointing increase of only 22,000 nonfarm payrolls, far below the projected 75,000. While healthcare saw gains, losses in federal government employment, mining, quarrying, and oil/gas extraction offset those gains. This follows the firing of the previous BLS commissioner by President Trump due to weak employment data from the previous month. Furthermore, analysts are noting a possible rate cut by the Federal Reserve.
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E.J. Antoni, Donald Trump’s nominee for BLS commissioner, has proposed suspending the monthly jobs report, advocating for the use of quarterly data instead. Antoni, previously the Heritage Foundation’s chief economist, cited concerns about the accuracy of the monthly figures, arguing that a lack of confidence in the data could have serious consequences for businesses and policymakers. This proposal follows Trump’s dismissal of the previous BLS commissioner and claims that the July jobs report was inaccurate due to revisions in employment figures. The July report was criticized for revisions that indicated significant downsizing in the market, potentially signaling an impending recession.
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John Q. Hosedrinker