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Government Employment Surges by 785,000 in September, Raising Questions About BLS Data Accuracy
October 7, 2024
The U.S. Bureau of Labor Statistics (BLS) released its September employment report, revealing a staggering increase of 785,000 government jobs. This figure, which far outpaces private sector job growth of 133,000, has sparked debate over the accuracy and methodology of the BLS data.
According to the BLS Household Survey, wage and salary government employment saw a significant spike, while private sector employment grew modestly. However, discrepancies in the data have raised eyebrows. The BLS reported a total nonagricultural wage and salary employment increase of 822,000, but the numbers do not align when broken down by sector. The agency attributed this inconsistency to the independent seasonal adjustment of various series and updated population controls.
The surge in government employment is particularly notable when compared to historical trends. Since 1948, government employment has generally followed a steady trajectory, but the September spike stands out as an anomaly. Critics, including financial blog ZeroHedge, have questioned the validity of the data, pointing to potential sampling errors or methodological flaws.
Unemployment Rate Calculations Under Scrutiny
The BLS reported a slight decline in the unemployment rate to 4.1% in September, down from 4.3% in August. This calculation is based on an employment level of 161,864,000 and a labor force of 168,699,000. However, analysts have noted that the unemployment rate is highly sensitive to changes in employment levels. For example, if the employment level had remained flat instead of increasing by 430,000, the unemployment rate would have stayed at 4.3%.
Discrepancies Between Surveys
The BLS uses two primary surveys to measure employment: the Household Survey and the Establishment Survey. While the Household Survey reported a massive increase in government jobs, the Establishment Survey suggested a much smaller gain of just 31,000 government jobs. This stark contrast has led to further skepticism about the reliability of the September report.
Adding to the confusion, the BLS recently revised its August job numbers downward by 818,000, citing errors in its birth-death model and small business sampling. These revisions have cast doubt on the accuracy of recent employment data, with some analysts suggesting that the September report may be similarly flawed.
Economic Implications
The reported surge in government employment comes amid broader economic uncertainty. Small businesses, as measured by ADP data, have been reducing workers for five consecutive months, signaling potential weakness in the private sector. Meanwhile, the federal budget has ballooned in recent years, increasing from $4.4 trillion in 2020 to over $6 trillion under the current administration. This expansion has likely contributed to the growth in government jobs, but the scale of the September increase has left many questioning its plausibility.
Critics Weigh In
Critics have been quick to point out the potential political implications of the September report, which was released just weeks before the November elections. Some have accused the BLS of manipulating data to paint a rosier picture of the economy, while others have called for greater transparency in the agency’s methodologies.
Danielle DiMartino Booth, a prominent economist, has gone so far as to suggest that the U.S. has been in a technical recession for the past 20 months, further undermining confidence in the BLS figures.
Conclusion
While the September employment report highlights a significant increase in government jobs, the inconsistencies and methodological questions surrounding the data have left many analysts skeptical. As the economy continues to navigate uncertain terrain, the accuracy of government statistics will remain a critical issue for policymakers, investors, and the public alike.
For now, the September report stands as a contentious topic, with some calling it the "worst yet" in a series of questionable BLS releases.
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