Behind Biden’s Job Report: Disturbing Facts We Can’t Ignore

Amid the prevailing aftermath of the payroll report, attention has fixated on the disparity between the initially robust (though soon-to-be downwardly adjusted) headline payroll figure of 187,000 (barely surpassing the forecast of 170,000), juxtaposed with the unexpected spike in the unemployment rate from 3.5% to 3.8%, marking the highest level since February 2022. Delving deeper into today’s job assessment, the grim truth behind the economic impact of the Biden administration’s fiscal policies is becoming vividly apparent.

Let’s begin with the revisions. Those who closely track economic data releases from the Biden administration have noticed a recurring pattern of downward revisions. This trend persisted this month as well, with every monthly jobs figure undergoing a revision, seemingly aimed at initially showcasing a robust number (which also triggers algorithmic market buying), only to quietly revise it downward one or two months later when scrutiny wanes and thereby cushion the path for the impending economic downturn.

Examining the statistics underlying the headline job figures, the overall nonfarm payrolls data (derived from the Establishment Survey) might have appeared somewhat weak at 187,000. Nevertheless, the more accurate Household Survey revealed a different perspective. The number of employed individuals rose by 268,000, reaching 161.3 million. This marked the second month the Household Survey surpassed the Establishment Survey’s count.

So far, so good. Yet, two significant issues arise with this seemingly positive data. Firstly, the Birth-Death (B-D) model, an integral part of the Bureau of Labor Statistics (BLS) Current Employment Statistics (CES) release, plays a pivotal role in refining the raw job figures. This model adjusts the actual job numbers to align with a desired outcome. In August, the Birth-Death adjustment saw its fifth successive upward boost, contributing 103,000 jobs to the tally. This adjustment assumes that newly established businesses created around 103,000 jobs despite the absence of observable facts supporting this number. The BLS utilizes historical trends to conduct the regression, which is only known to them.

Regrettably, the situation deteriorates further. While the Establishment Survey exclusively focuses on job quantity, the Household Survey, which also exhibited strength this month, evaluates the quality of the gained or lost jobs. Specifically, it categorizes jobs into full-time and part-time positions.

A glance at this month’s adjustments unveils a startling revelation. Oddly absent from statements by the Biden administration and associated economic proponents is the BLS’s report that the number of full-time jobs plunged once again in August, plummeting by 85,000 to 134.2 million. This followed July’s staggering 585,000 declines, culminating in a two-month full-time job reduction of 670,000—the most substantial two-month drop since the onset of COVID-19 lockdowns in early 2020 when 12.5 million full-time jobs were lost in a single month!

Curiously, if full-time employment endured such a setback, how did the BLS account for an increase of 222,000 employed individuals? The answer is simple: through a significant surge in part-time workers. Indeed, August witnessed a rise of 32,000 reported part-time workers, coupled with the nearly record-breaking upswing of 972,000 in July. The cumulative two-month surge amounted to just over 1 million part-time positions, reaching 27.185 million.

Examining the quantitative aspect further, the number of multiple jobholders—individuals juggling more than one job simultaneously to make ends meet was observed. This statistic offered a modest silver lining in August as it decreased by 85,000 compared to July, resting at 8.028 million. Nonetheless, this number remains close to its pre-pandemic peak.

Additional aspects come into play: The August payroll figure relies heavily on Seasonal Adjustments. SouthBay Research notes that 159,000 of the 179,000 Private Payroll growth were a product of these adjustments—constituting a staggering 90% of the total growth. Remarkably, although the conclusion of COVID-19 shelter-in-place measures six months prior, the Payroll model continues to operate as if exceptional treatment is still required. This is evident in the persistently bullish Seasonal Adjustments throughout the year, as showcased in the accompanying chart, portraying a troubling image of weak hiring.

The unadjusted hiring situation marks the second poorest performance since the Great Recession of 2009. As SouthBay concludes, the narrative of a robust labor market lacks substantiation when confronted with the actual data.

To consolidate the findings, the headlines might suggest that the US added 187,000 jobs in August, and the number of employed individuals increased by 222,000. However, thoroughly examining the adjustments applied to the underlying data and its composition reveals a different reality. The unadjusted increase amounts to 20,000 jobs—the bleakest August since the global financial crisis. Additionally, the number of well-paying, full-time jobs dwindled by 85,000 in August, counterbalanced by a rise of 32,000 part-time positions.

Accounting for the considerable fluctuations in July, the net effect manifests as a 670,000 decrease in full-time employment over the past two months, mitigated by a surge of 1,004,000 in part-time positions. This phenomenon contributes to the rise of multiple jobholders as they struggle to keep up with the changing economic landscape of “Bidenomics.”