US job report revisions suggest the economy is worse than first portrayed

The United States labor market continues to play a key role in highlighting the state of the economy, with the latest statistics revealing a troubling picture.

In this line, sustained job report revisions in the first half of 2024 have raised concerns. 

Particularly, data shared by the data-driven research platform The Kobeissi Letter in a July 9 X post indicates that the Bureau of Labor Statistics (BLS) revised job growth figures downward for four of the first five months of 2024. 

These revisions have raised concerns about the accuracy of initial employment data and its economic implications.

The most notable revision occurred in January, with the job growth number adjusted from 353,000 to 256,000, a reduction of 97,000 jobs. February’s job growth figure was also revised downward by 39,000. 

April and May experienced downward adjustments of 67,000 and 54,000 jobs, respectively, totaling a combined reduction of 111,000. Overall, the revisions for the first five months of 2024 amount to a decrease of 240,000 jobs.

Potential economic downturn 

Notably, these consistent downward revisions raise questions about the reliability of the initial headline job numbers, which policymakers, economists, and investors often use to gauge the health of the labor market and the broader economy. 

The revisions suggest that the labor market may not be as robust as initially portrayed, which could affect economic policy and investment decisions.

Furthermore, the changes in job data is accelerating concerns about the United States possibly entering a recession in the second half of 2024. At the time of the initial reporting, the jobs data portrayed a healthy job market, but recession-triggering indicators have persisted.

For instance, the number of jobless Americans has steadily risen over the past year, which is seen as a potential recession trigger. Additionally, although the economy has added more jobs every month, there is evidence that most jobs created in 2024 are part-time gigs. 

Therefore, part-time jobs make up a significant portion of the U.S. labor report, even as most states continue to witness rising unemployment.

In the meantime, it remains to be seen if the recession will materialize, as most analysts anticipate what could be the worst economic downturn in decades.