The federal government gets a great deal of grief when it issues economic reports and it’s not hard to see why. The last several years include lots of reasons for skepticism about the “experts,” with many of them related to COVID – “fifteen days to slow the spread,” six-feet distance rules that turned out to have no scientific basis, school lockdowns, dying from COVID versus dying with COVID...etc. – the list goes on and on.
Add to that experts vouching for Trump-Russia Collusion in 2016-17 and then casting doubt about Hunter Biden’s laptop in 2020 and we can see why many investors have become skeptical about everything the federal government says, including the monthly reports on the economy, like the jobs report that comes out early every month.
We think skepticism is warranted, too, but also think that sometimes the government gets a little too much grief. The US economy is massive with lots of moving parts; trying to keep track of it is an enormous undertaking and in most cases the mid-level government workers charged with the employment report, for example, are doing the best they can with the tools they have available.
Case in point: Friday’s jobs report showing nonfarm payrolls up 143,000 in January, upward revisions of 100,000 for November and December, but a downward revision of 589,000 for March 2024, almost a year ago. Some observers focused on that last part, the downward revision that seemed to swamp those other upward moves.
Obviously, that big downward revision is important. But let’s put it in context. Back in August the Labor Department reported that based on data from unemployment claims it expected to revise March 2024 payrolls downward by 818,000. At that point many said this proves that the Labor Department had been putting its thumb on the scale to help the Biden Administration say the economy was better off than it actually was.
