It turns out that employment was not as strong in 2018 and early 2019 as the government initially reported – with about half a million jobs.
The US economy had about 501,000 fewer jobs by March 2019 than originally estimated by the Bureau of Labor Statistics' survey of business establishments. This is the largest revision since the downturn of the 2009 Great Recession. They also signal that the economy is a little weaker than previously thought and could give the Federal Reserve an even bigger reason for cutting interest rates in September.
"This makes some sense, because the average increase of 223,000 in 2018 seemed too good to be true in light of how difficult the labor market has become and how much trouble it is claimed that firms are finding of skilled workers, "says chief economist Stephen Stanley of Amherst Pierpont Securities.
The average 223,000 monthly increase in employment in 2018 – the strongest in three years – could be reduced from 180,000 to 185,000, according to economists.
Fewer jobs were created in restaurants, hotels, retailers and professional business services. Recruitment in leisure and hospitality decreased by 175,000, business services by 163,000 and retail by 146,400. The maturing #labor market will mean less job growth ahead pic.twitter.com/QRC3hann9A
– Gregory Daco (@GregDaco) August 21, 2019
This the annual "reference" audit is much larger than usual, the 2018 Preliminary Audit showed, for example, that the economy produces 43,000 additional tional jobs than initially reported.
Each year, the Bureau of Labor Statistics updates its data on the basis of unemployment data, which almost all employers are required to submit in the States. These revisions are generally quite small and reflect about one-tenth of 1% of total non-farm employment
This revision reflects a 0.3% adjustment, although their number is not conclusive. The 2018 revision eventually changed again to -1,000 from 43,000.
The final results will be published in February 2020.
It remains to be seen whether lower employment figures ultimately indicate that wage growth has been much stronger in the last year than government figures tell us.
Hourly wage growth reached just above 3% annually, a surprisingly modest increase, given that the unemployment rate is close to the 50-year low of 3.7%. Tight labor markets typically result in an annual wage increase of up to 4%.