Inconvenient truth

The Bureau of Labor Statistics (BLS) reported that the non-farm payroll (NFP) data for March to December 2024 overstated job growth by about 793,000 jobs compared to the Quarterly Census of Employment and Wages (QCEW). The NFP initially estimated 1.4 million jobs added, while the QCEW, covering 97% of employers, showed only 607,000—a 57% lower figure. This gap stems from the NFP’s reliance on a smaller sample (629,000 establishments) and the BLS’s birth/death model, which estimates business openings and closures but can misfire during economic shifts, like oversampling large firms or missing small business activity. Employment analysts argue the QCEW might undercount jobs from undocumented workers paid off the books, but the BLS considers QCEW data more reliable due to its near-comprehensive scope. The fact of the matter is that we have been working with numbers that were severely overstated. Maybe we even have been working with inflation numbers that have been artificially softened through the Owners Equivalent Rent, almost 30% of the CPI report. If that is the case, what government will correct the slack? Likely, nothing will be done until we have a crisis, because the “error” is convenient.

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