The U.S. economy added significantly more jobs than anticipated in May, but key data in the latest jobs report reveals cause for concern, economists told the Daily Caller News Foundation.
The country added 339,000 jobs in nonfarm payroll employment in the establishment survey, which collects data from nonagricultural businesses, according to Bureau of Labor Statistics (BLS) data published on Friday. The household survey, which collects data from households, revealed some indications that the economy is headed in a worrisome direction, according to experts who spoke to the DCNF.
“While the headline jobs number blew away expectations, that’s not the whole story,” E.J. Antoni, research fellow for Regional Economics at the Heritage Foundation’s Center for Data Analysis told the DCNF. “When the report is viewed wholistically, as opposed to cherry picking a single datum point, it is further evidence that we are headed toward recession.”
The household survey showed that the number of Americans working multiple jobs went up and unincorporated self-employment went down, according to the BLS data. “When people move from self-employment to working for a business, or when they take a second (or third) job, that increases nonfarm payrolls, even though the actual number of people employed hasn’t changed,” Antoni told the DCNF.
The household survey does not count any “duplication of individuals” because they are only counted one time, regardless of how many jobs they work, according to the BLS.
“The household survey showed the opposite [of the establishment survey], with a loss of 310,000 jobs,” Antoni said. It also showed a drop of 23,000 full-time jobs and that part-time jobs plummeted by 220,000, according to the household data.
He said the report shows that the labor market has moved from “growth to contraction.”
“The report dovetails perfectly with other data showing cash-strapped consumers getting additional jobs, or leaving self-employment, because their wages aren’t keeping up with inflation,” Antoni added.
Chief Economist at the America First Policy Institute Michael Faulkender told the DCNF that Friday’s report was confusing.
“If you ask companies, they are employing more people, he said. “But if you ask households, fewer people are working.”(RELATED: Job Gains Exceed Expectations Despite Fed’s Best Efforts To Cool Economy)
Something broke in Mar ’22 – the establishment survey and household surveys have significant deviation: pic.twitter.com/zKVJLP9wJ6
— EJ Antoni (@RealEJAntoni) June 2, 2023
“There is a divergence between the payrolls and rate data that suggest that the data is not capturing some key information,” economist with the American Institute for Economic Research Pete Earle told the DCNF.
Antoni told the DCNF that the lack of accuracy in government data can have serious consequences.
“The accuracy of official government data ha[s] declined, and the Biden administration owes the Federal Reserve, Congress, and the American people an explanation,” he said. “All three groups will have additional difficulty making important decisions without reliably accurate data. We therefore run an increased risk of implementing ineffective public policy.”
Unemployment rose .3% to 3.7%, according to the report. Faulkender explained this rise came from the decline in workers recorded in the household survey and that this could be an ominous sign for the economy. “If gig workers get hit with labor reduction / layoffs before salaried employees, this could be an early indication of job impacts that are coming,” Faulkender told the DCNF.
In a statement on Friday, President Joe Biden said, “today is a good day for the American economy and American workers. We learned this morning that the economy created 339,000 jobs last month.”
President and CEO of Job Creators Network Alfredo Ortiz also raised concerns about the unemployment rise and what it means for the near future. It shows “the difficulties many businesses are having in today’s stagflationary economy,” Ortiz said in a statement on Friday. “Since the labor market is a lagging indicator, expect unemployment to increase and topline job growth to decline in the months ahead.”
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