With the release of the Philadelphia Fed’s first benchmark, we have the following 12-month changes in employment (000) from various sources:
From May 2023 to April 2024, according to the Philadelphia Fed the employment of unemployed farm workers increased by only 2.4 million instead of 2.8 million as reported by CES.
Figure 1: Non-farm payrolls from the CES (blue), the QCEW adjusted for geometric movement by author (blue), Business Employment Dynamics (pink), and the Philadelphia Fed’s first benchmark (green), all in the log, 2023M05=0. The Philadelphia Fed series is the official CES adjusted by the ratio of the first regional benchmark to the CES total regional average. Source: BLS via FRED, BLS, QCEW/BLS, BED/BLS, Philadelphia Fed and author’s statistics.
So the Philadelphia Fed estimate implies a slowdown in NFP employment growth by about 400,000 officials. Does it change our view of the trajectory of employment measures? Figure 2 shows the log series related to May 2023.
Figure 2: Nonfarm payrolls from CES (blue), CES hours (red), QCEW adjusted for the geometric mean by author (blue), Business Employment Dynamics (pink), and the Philadelphia Fed’s first benchmark (light green), all in log, 2023M05 =0. The Philadelphia Fed series is the official CES adjusted by the ratio of the first regional benchmark to the CES total regional average. Source: BLS via FRED, BLS, QCEW/BLS, BED/BLS, Philadelphia Fed and author’s statistics.
So, using the Philadelphia Fed estimate that includes QCEW data, instead of rising 1.58% in April 2024 compared to May 2023, NFP rose 1.35%
However, the CPS series adjusted to match the CES NFP concept should be viewed with great care, given that it is based on a civilian employment series that includes new population controls.
So it’s possible that the real employment trajectory is depressed relative to officials, not enough to call for a recession, but perhaps strengthening the case for monetary policy easing.
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