The July jobs report downgraded our employment numbers from May and June.
INDIANAPOLIS — The July jobs report downgraded our employment numbers from May and June. It turns out employers added far fewer jobs than previously reported.
That drop led to President Donald Trump calling the report “rigged” and firing the Bureau of Labor Statistics commissioner, Erika McEntarfer. The Bureau of Labor Statistics publishes the report typically on the first Friday of every month.
Mark Hamrick with Bankrate said there is no evidence the jobs report numbers are rigged.
“It is immensely unhelpful to have these accusations, which are unfounded, that the data has been infected by politics,” Hamrick said.
What is the jobs report?
The purpose of the report is to provide a snapshot of how the country is doing. Specifically, who’s working and how many jobs got added to the economy.
Hamrick said Americans need this information to make daily decisions.
“Whether we’re running a $1 trillion company, or if we’re just trying to figure out, ‘Oh, are we going to spend as much on vacation this year?'” Hamrick said.
The data in the reports come from two surveys: households and employers. Employers are formally called “establishments” in the reports.
Households provide demographics and unemployment rates, while employers provide openings and earnings numbers.
Why do revisions happen?
Revisions are a normal part of the jobs report process. After the report comes out, revisions are later released to include additional information not available at the time of the initial release.
For example, survey participants may not respond to the initial deadline.
“The ‘Holy Cow’ moment in the July jobs report wasn’t where we typically see it. It was with the downward revisions for jobs added for the months of May and June, where we subtracted 258,000 jobs, and that was a big change, changing our view of what’s been happening,” Hamrick explained, “If it had been 5,000, 10,000 or 15,000, that’s just sort of a marginal revision. Doesn’t change the narrative.”
So, why the big swing?
There are a few reasons.
Hamrick said survey response rates have been declining for some time, which can make the initial numbers less accurate.
Some also believe statistical agencies need more funding to improve the data collection — an unpopular investment.
“There has been a bipartisan outcry about this, so maybe, maybe there’s an understanding that it can’t be ignored,” Hamrick said.
The lower job numbers, according to economists, can be attributed to a slowing economy and job market impacted potentially by trade and immigration.