Should We Be Worried About Jobs Report Revisions? | Guy Berger
Episode publishedPodcast: Forward GuidanceForward Guidance
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The annual revisions have been negative. They were negative last year. I think they might have been negative the year before, and we're probably due for another big negative one this year. I don't want to say that, like, I'm glad to have these revisions. I just recognize that it's not an easy problem to solve. There's all these huge things happening and they're pushing against each other. Maybe it is that the demand side effects of the tariffs are gonna really start kicking in. That's one possibility. The other one is, by the way, the immigration squeeze is ongoing. My gut is still the weakeni
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It's an honor being here. Thanks for having me, Felix.
Super excited. So, okay, we are talking at a time where it feels like there's a lot of crosscurrents happening in terms of labor markets, labor market data, how it's gathered. We're recording this Tuesday, August 12. We just had the announcement of the new BLS commissioner that Trump is nominating to be confirmed by the Senate, EJ Antony. So it's a very timely moment right now to really set the stage for a one on one style of just really understanding labor market data. How does it work? How does the sequences of all work? So yeah, nobody better to help us walk through all of this than yoursel
Yeah. So you covered the first half, which is there's two. There's the household survey and the establishment survey. They go in the jobs report. The household survey is where you get data like the unemployment rate, the participation rate, prime work age, employment population ratio. There's some other stuff in there. Comes from the hostile survey, but it's like the official names of current population survey. They call people households on the phone and they just ask them like, how old are you? How many people do you have in your household? They ask a bunch of other questions, but they also
So, okay, I think that catalyzes the first burning question for a lot of folks, is, you know, it's 2025. We have AI, we have all these technological innovations. Why do we have provisions in the first place? And to answer that, would love to just better understand the statistical process involved with this survey data. And why is it that the initial pass, it's expected to have revisions? And then the second question associated with that is, yeah, what are normal revisions, quote unquote? And why is it that it gets more accurate over time? And why is it that we get this more blunt number upfron
Yeah, sure. So the first thing that Let's think about it this way. One thing that could be done theoretically for tongue science fiction is that in fact somehow we set up every business, including pretty lo fi businesses. I'm gonna pick something. There's a food truck in the corner and there's Some of them still operate with physical cash registers. And we set them up with some sort of super automated system. And either it, regardless of what they choose to do, just sends information to DC. And by the way, this would not just have to do wit
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