Significant revisions to labor market data don’t change underlying story of a strong economy
Below, EPI senior economist Elise Gould offers her insights on today’s release of the jobs report for January. Read the full thread here.
First jobs #NumbersDay on the 2025 economy for #EconSky data watchers!!!
The U.S. labor market started the year by adding 143k jobs as the unemployment rate ticked down to 4.0%. As with much of the last year, there were significant gains in health care and social assistance employment in January.
— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 7:39 AM
Some caution should be used in making comparisons across time because of survey revisions.
The establishment survey was revised for January and prior months to reflect the annual benchmarking process. The household survey’s updated population estimates are reflected only in January 2025.
#EconSky
— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 7:46 AM
BLS experts provide useful information on how to interpret changes across time. After removing the population controls, we can get a read on what changed between December 2024 and January 2025. The unemployment rate dropped 0.2pps while labor force participation and the employment rate held steady.
— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 7:51 AM
The establishment survey is revised monthly to reflect updated estimates. For instance, Nov and Dec jobs were revised up 100k using additional data from employers/governments. The annual revisions to the survey reflect benchmarking to the unemployment insurance administrative records for March 2024:
— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 8:01 AM
The household survey makes adjustments to the population controls just for January 2025 so it makes it difficult to say what happened to the unemployment rate for Black workers between Dec and Jan (let alone the usual volatility), but I interpret the tables to indicate there was no change.
— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 8:20 AM
While there is some volatility in the month-to-month numbers, year-over-year nominal wage growth held steady for January 2025, rising 4.1% over the year. Nominal wage growth remains consistent with productivity growth and the Fed inflation targets.
#NumbersDay #EconSky— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 8:28 AM
Nominal wage growth of 4.1% is consistent with the Fed’s 2% inflation target and productivity growth but not strong enough to claw back the loss of labor’s share over the pandemic recovery. Still lots of room for wages to rise without putting upward pressure on Fed’s target. #EconSky #NumbersDay
— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 8:48 AM
Want to see more data? Head on over to @epi.org's new State of Working America data repository where you can find comprehensive data on jobs, wages, unions, productivity, prices, and inequality by demographic groups and geography.
#EconSky #NumbersDay
data.epi.org— Elise Gould (@elisegould.bsky.social) February 7, 2025 at 9:08 AM
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