But aside from the obvious fact that quarterly job gains year-over-year have dropped for 8 consecutive quarters (albeit precisely as the Fed intended with a perfectly executed soft-landing with unemployment holding steady at historic lows throughout their hiking regimen), December’s report provided further evidence that under the hood, there are indications that things in the job market aren’t so rosy.
Job gains were again powered by a narrow handful of sectors (Education/Health, Leisure/Hospitality, and Government), the Household Survey reported a drop in employment of 683,000 jobs, labor force participation dropped to 62.5% (the lowest level since February), and October and November’s job gains were revised down by a combined 71,000. With those revisions, job gains averaged just 165,000 in Q4.
And speaking of revisions, there is no doubt that the initial jobs reports issued by the BLS are becoming increasingly unreliable and are at a growing risk of becoming largely, if not entirely, irrelevant to anyone who wants to truly understand what is going on in the job market and, therefore, in the economy as a whole.
In 2022, BLS revisions issued subsequent to the initial release totaled -66,000, a downward revision for the year of just 1.4%. With revisions still to come in February and March, revisions so far for 2023 have totaled 443,000 jobs, down 14% from the initial data released.