That’s the title of Heritage EJ Antoni’s article:
In the final quarter of 2023, these monthly jobs reports showed an increase in farm payrolls of 637,000—a strong increase, to be sure. But the largest survey of businesses shows that this was an overestimation.
The BLS also publishes Business Employment Dynamics, or BED, reports each quarter, from a larger survey of 9.1 million private establishments. That’s more than 10 times the size of the survey used in the monthly jobs report, so the BED has the rule of large numbers on its side when arguing for accuracy.
The larger survey showed only 344,000 jobs were added in the last quarter of 2023, or about half the amount estimated by the monthly jobs report. Contrary to the glowing business headlines every month, the labor market is not that strong. [emphasis added by MDC]
It is interesting that Dr. Antoni compares apples and oranges (NFP and private NFP). A relevant comparison is private NFP and private NFP. I do this in the following graph.
Figure 1: Change in private non-farm employment in 2023Q4, in 000 years, from CES (blue), from Business Employment Dynamics survey (tan), from ADP (green), from QCEW seasonally adjusted by author using X -13 (red). A sample monthly series at the end of the quarter. Source: BLS, ADP, and author’s statistics.
If 464K looks like less than double 344K, you’d be right. 637K, which is what Dr. What Antoni is saying, it is full employment that is not farms, no which is confidential nonfarm payroll employment. Make a fair comparison, and it’s the smallest of the three. The ADP – not a survey-based figure – has a slightly higher value than the one from the BLS BED. Now, the Quarterly Census of Employment and Wages (QCEW) is not seasonally adjusted as reported. During the season I adjust the series using X-13 using log transformation. The resulting number in 34K is very small so it better fits the case Dr. Anthony. On the other hand, these figures, although not from research but rather from censuses, are preliminary. As additional tax (withholding etc.) comes in, it will be revised.
Perhaps it is better to look at trends, rather than single quarter data. Here are the cumulative changes for 2023.
Figure 2: Change in non-farm private employment from 2022Q4, 000’s, from CES (blue), BED (tan), ADP (green), BED (tan). All monthly series at the end of the quarter. QCEW is adjusted seasonally by the author using X-13. Source: BEA, ADP via FRED, and author’s calculations.
Figure 3: Cumulative percent change in private nonfarm payrolls from 2022Q4, from CES (blue), BED (tan), ADP (green), BED (tan). All monthly series at the end of the quarter. QCEW is adjusted seasonally by the author using X-13. Source: BEA, ADP via FRED, and author’s calculations.
By the end of 2023, private NFP increased by 2304 (1.7%) according to CES, while it increased by 1820 (1.4%) according to QCEW. So Dr. Antoni is right that some methods suggest slow growth, but not as he says in his article. For more job comparisons as of April 2023, see this post.
Dr. Atonji also has a general critique of the relationship of government statistics to reality here.
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