Phantom Jobs, The Local Economy & Florida’s Primary Geography – Top 3 Takeaways – August 22nd, 2024
- Where did they go? On Wednesday the Bureau of Labor Statistics had a (not-so) minor revision to the ultra-important jobs number reported by the Bureau monthly. They were off by about 30%. And to be clear, the BLS is saying that their already previously revised, and therefore theoretically corrected, jobs numbers were still off by about 30%. In other words, 818,000 jobs the government said had been created over the past year – never existed. Whoopsie daisy...right? If you’d felt like the economy hasn’t been nearly as good as you’d been hearing from the government – guess what, you were right. If you’ve felt like the jobs market has been far tighter than what you’d been hearing, and what I’ve increasingly been hearing from listeners, guess what you were right – and you and your family haven’t been alone in having a harder time finding a new career opportunity. But here’s the thing...and it's another significant thing. The newly corrected government numbers are only accounting for previously overstated job growth from April of 2023 through March of 2024. What are the odds that the BLS suddenly started to get it right? What this means is that the labor market, which according to the most recent government report hadn’t created enough new jobs to keep up with population growth, hence a rising unemployment rate, could potentially be even worse. And if the government could blow a year’s worth of reported job growth by 30%... what are the odds they’re getting the rest of what they’re reporting right? This news dropping yesterday...
- Increased the likelihood that the Federal Reserve will be more aggressive in cutting interest rates sooner than later. That’s one takeaway from this. Lower interest rates are on the way. Here’s the other. Trust the ADP Report, not the government’s initial jobs report. Historically, after all revisions are accounted for there’s only been a 2% difference in the reported jobs numbers between the ADP Report and the BLS’ government jobs report. But the getting there is very different. ADP’s initial reporting has been far more accurate, which makes sense. ADP is the largest payroll processing company in the world and their data is based on hard data. The government’s monthly jobs report is based on government call out surveys of HR professionals that’s then indexed. Notably, save the most recent month’s reporting, the ADP Report had been showing many fewer created jobs than the government’s report had been. In fact, over the past year ADP reported over 1.1 million fewer jobs than the government did. Many wondered why or how there was still a big gap. Well now we know. Almost all of that was accounted for by government incompetence. And what’s also implied is that the government’s reporting since March has likely also been overstated. Now imagine for a moment that your job was to survey and calculate numbers for a living. How long do you think you could be off by 30% and still have a job? With so many jobs disappearing, the incompetent government workers responsible for overstating the health of the labor market, and thus the economy, should probably be at the top of the list of people who see their jobs disappear (but because it’s government that won’t happen). Here’s the next question that comes to mind. What’s going on locally? The most recent government jobs numbers for the West Palm Beach metro showed a net loss of jobs year-over-year. That was before the massive national revision. So, what’s the real number locally? What’s the actual impact locally? It led to me thinking of a note from a gentleman who recently asked if I knew of any good job opportunities that might be a fit for his son who has a master's degree. In his words: It’s getting tough out there for these young adults. Again, if this is your family’s experience, you’re not alone and it isn’t just you. The overall economic picture had been inflated by fake news.
- Upon further review... In my top three takeaways on Wednesday my summary of Florida’s primary election results was that the election was a mixed bag politically. The lower-than-average turnout for the August primaries suggested a lack of voter enthusiasm on both sides, but that also lower turnout years had typically been better presidential election years for Democrats. At the same time Republicans, who currently have a 7.4% voter registration advantage within the state, outvoted Democrats by about 14% on the day, thus the mixed bag of results. Digging in a bit deeper, there did appear to be more to the partisan split story. Republicans are the majority party in 57 of Florida’s 67 counties currently. Only seven had below average turnout on Tuesday – meaning 85% of Florida’s Republican majority counties produced better than average turnout. Conversely, when the dust settled in Florida’s ten Democrat majority counties, only 3 produced better than average turnout. Meaning 70% of Florida’s Democrat majority counties, including the state’s four largest – Miami Dade, Broward, Hillsborough and Palm Beach all produced below average turnout on Tuesday. So, upon further review it’s clear that Florida’s Democrats aren’t as fired up to vote when given the opportunity as say the Big ‘O was at the DNC, and they don’t appear to be perceiving Kamala Harris as the second coming. Upon further review turnout was lower than usual because it was especially low this cycle in Florida’s remaining Democrat majority counties.