US has half a million fewer jobs than believed after big government revision




 

The labor market seemed to defy gravity last year, generating more than 200,000 jobs a month despite a historically low unemployment rate that made it harder for employers to find workers.

Turns out job growth wasn't as robust as it appeared.

The Labor Department revised down total job gains from April 2018 to March 2019 by 501,000, the agency said Wednesday, the largest downward revision in a decade.

The agency's annual benchmark revision is based on state unemployment insurance records that reflect actual payrolls while its earlier estimates are derived from surveys. The preliminary figure could be revised further early next year.

The large change means job growth averaged 170,000 a month during the 12-month period, down from the 210,000 initially estimated, according to JPMorgan Chase.

Hit hard by joblessness: Crippling unemployment: The 50 counties hit hardest by joblessness

Recession rumblings: A decade after the big one, what kind of recession will we have next?

Employment in several industries was revised down especially sharply. Payrolls dropped 175,000 in leisure and hospitality, and 146,000 in retail - two bellwether service sectors that depend heavily on consumer spending, the economy's main engine.

Employment also fell by 163,000 in professional and business services and 69,000 in education and health services.

Some industries saw their job figures revised up modestly, with a gain of 33,000 in information - including movies, broadcasting, publishing, telecommunications and some technology services - and 20,000 in financial activities.

The revised payroll data is more in line with what economists had expected at the start of 2018 in light of the roughly 4% unemployment rate that signaled fewer available workers, and an aging population.

"The mystery was how the economy is continuing to get 200,000 jobs a month," says economist James Marple of TD economics. "It's less of a mystery now."

The new figures also could have political implications. President Donald Trump regularly touted last year's blockbuster job figures, which many economists traced to the federal tax cuts and spending increases he spearheaded. The economy did grow 2.9% last year, matching its best performance since the 2007-09 recession. But growth has slowed this year and the jobs revisions indicate the economy may have had less momentum than believed heading into 2019.

"It's a moderate economy," says Joe Naroff, chief economist of Naroff Economic Advisors. "It's not a strong economy."

Now, many economists are forecasting a recession by next year, largely because of Trump's trade war with China and a slowing global economy.

This article originally appeared on USA TODAY: Jobs: U.S. employment is 501,000 lower than believed after revisions

COMMENTS

More Related News

Aussies tests supports as spread of Coronavirus dampens market sentiment
Aussies tests supports as spread of Coronavirus dampens market sentiment

Posted by OFX AUD - Australian Dollar The AUD edged lower through trade on Tuesday testing supports at 0.6850 having marked intraday lows below the key support handle at 0.6842. Broader market sentiment was largely subdued throughout the day as mounting concerns the recent outbreak of the Coronavirus in China could dampen … Continue reading "Aussies tests supports as spread of Coronavirus dampens market sentiment"The post Aussies tests supports as spread of Coronavirus dampens market sentiment appeared first on .

UK jobs boom returns as Bank of England considers rate cut
UK jobs boom returns as Bank of England considers rate cut

British job growth was the strongest in nearly a year in the three months to November, according to data which could ease concerns at the Bank of England about the extent of a slowdown in the labour market. Signs of weakness in job creation prompted two BoE interest-rate setters to vote for a cut to borrowing costs at the end of last year, and three others, including Governor Mark Carney, have said recently that more stimulus for the economy might be needed. Official data published on Tuesday showed the number of people in employment rose by 208,000 to 32.90 million, the biggest increase since the three months to January 2019 and much stronger than the median forecast in a Reuters poll...

ILO sees end to falling global unemployment rate
ILO sees end to falling global unemployment rate

The global unemployment rate has stabilised after declining for nine years since the crisis, the International Labour Organization (ILO) said on Monday, and it could edge up next year as the world economy slows. The rate stood unchanged at 5.4% in 2019, or 188 million people, and is expected to remain there in 2020 and rise to 5.5% in 2021, the ILO said in its annual report. "This means that the gradual decline of the unemployment rate observed between 2009 and 2018 appears to have come to a halt," it said, citing a world economic slowdown, especially in manufacturing.

How can the Democrats explain away Trump
How can the Democrats explain away Trump's go-go economy? Answer: They can't | Opinion

You almost felt sorry for them, the six Democratic presidential candidates having their last debate before the Iowa caucuses.

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Latin America