Fed Chair Jerome Powell pointed on Wednesday to a job-market risk that economists have been worried about for months: Official statistics could be drastically overstating recent hiring.
Powell said that Fed staffers believe that federal data could be overestimating job creation by up to 60,000 jobs a month. Given that figures published so far show that the economy has added about 40,000 jobs a month since April, the real number could be something more like a loss of 20,000 jobs a month, Powell said.
“We think there’s an overstatement in these numbers,” Powell said in a press conference following the central bank’s two-day policy meeting.
Published data already show the labor market has slowed significantly this year, down from rapid hiring after the Covid-19 pandemic. This slower pace means big data revisions can more easily reveal the economy is shedding jobs, not adding them.
“It’s a complicated, unusual, and difficult situation, where the labor market is also under pressure, where job creation may actually be negative,” Powell said.
That concern provided some of the backing for the Fed’s decision to cut interest rates at a third straight meeting, Powell said, despite a labor market that still looks healthy on the surface, with unemployment at a relatively modest 4.4% in September and a net gain of 119,000 jobs that month. Next week, the Labor Department will report fresh jobs numbers for October and November, as well as possible revisions for previous months.
hypsignathus on
OP didn’t provide submission statement BUT SHOULD HAVE
but this is interesting to me so I’ll give a half-assed attempt in their stead
There has been chatter about how accurate/trustworthy the numbers are coming out of the US Statistical Service agencies, especially the BLS since Trump fired its head, McEntarfer. I think it’s notable that the Fed Chair is jumping on the bandwagon, because the Fed/FOMC relies on BLS data to inform its predictions. Now the Fed Chair is saying they’re less reliable–it’s a really striking statement from a monetary policy official who thinks so carefully about how he might inadvertently shake the market that he is stuck wearing the same color tie all the time.
It’s also notable given that Trump is PO-ed with Powell, has grumped about replacing him numerous times, *and will be replacing him in the first half of next year*, when Powell’s chair term is up. Trump is likely to pick someone who will agree with Trump’s inclination to lower rates (even as other central banks are getting skittish and want to [stay flat or increase](https://www.reuters.com/markets/europe/will-ecbs-good-place-turn-into-passive-easing-2025-12-09/)).
So, what do you think about my take on the situation? Was Powell right to say this? Is he correct in his suspicion that the BLS model is obfuscating troubles in the labor market? If Trump chooses a toady for chair will Powell stick around to finish his term? Will Trump’s attempt at money printer round #892443284 keep things chugging or are we doomed to economic and financial apocalypse for *reasons*?
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Fed Chair Jerome Powell pointed on Wednesday to a job-market risk that economists have been worried about for months: Official statistics could be drastically overstating recent hiring.
Powell said that Fed staffers believe that federal data could be overestimating job creation by up to 60,000 jobs a month. Given that figures published so far show that the economy has added about 40,000 jobs a month since April, the real number could be something more like a loss of 20,000 jobs a month, Powell said.
“We think there’s an overstatement in these numbers,” Powell said in a press conference following the central bank’s two-day policy meeting.
Published data already show the labor market has slowed significantly this year, down from rapid hiring after the Covid-19 pandemic. This slower pace means big data revisions can more easily reveal the economy is shedding jobs, not adding them.
“It’s a complicated, unusual, and difficult situation, where the labor market is also under pressure, where job creation may actually be negative,” Powell said.
That concern provided some of the backing for the Fed’s decision to cut interest rates at a third straight meeting, Powell said, despite a labor market that still looks healthy on the surface, with unemployment at a relatively modest 4.4% in September and a net gain of 119,000 jobs that month. Next week, the Labor Department will report fresh jobs numbers for October and November, as well as possible revisions for previous months.
OP didn’t provide submission statement BUT SHOULD HAVE
https://preview.redd.it/ig2dngaxgi6g1.png?width=288&format=png&auto=webp&s=e491fd12f87d992dbd6f3ab0cdef79cd09e08493
but this is interesting to me so I’ll give a half-assed attempt in their stead
There has been chatter about how accurate/trustworthy the numbers are coming out of the US Statistical Service agencies, especially the BLS since Trump fired its head, McEntarfer. I think it’s notable that the Fed Chair is jumping on the bandwagon, because the Fed/FOMC relies on BLS data to inform its predictions. Now the Fed Chair is saying they’re less reliable–it’s a really striking statement from a monetary policy official who thinks so carefully about how he might inadvertently shake the market that he is stuck wearing the same color tie all the time.
It’s also notable given that Trump is PO-ed with Powell, has grumped about replacing him numerous times, *and will be replacing him in the first half of next year*, when Powell’s chair term is up. Trump is likely to pick someone who will agree with Trump’s inclination to lower rates (even as other central banks are getting skittish and want to [stay flat or increase](https://www.reuters.com/markets/europe/will-ecbs-good-place-turn-into-passive-easing-2025-12-09/)).
So, what do you think about my take on the situation? Was Powell right to say this? Is he correct in his suspicion that the BLS model is obfuscating troubles in the labor market? If Trump chooses a toady for chair will Powell stick around to finish his term? Will Trump’s attempt at money printer round #892443284 keep things chugging or are we doomed to economic and financial apocalypse for *reasons*?
https://preview.redd.it/w77oa9blli6g1.jpeg?width=750&format=pjpg&auto=webp&s=aa673e660e833287066df4aabff3cb8316e1e970
Does BLS measure our labor market the same way other countries do? Does everyone have wild swings with revisions?
Anybody currently looking for a job could’ve told you this.