I sure hope not, because stagflation would be extremely unpleasant for everyone. Central banks like the Federal Reserve would be forced to raise interest rates, to put stress on businesses and consumers, so businesses find themselves unable to raise prices further and consumers find themselves unable to demand greater pay at work.
Raising rates to put stress on businesses and consumers is the only method known to work for ending self-reinforcing high inflation. It's what Paul Volcker did at the Federal Reserve in response to the stagflation that started in the early 1970's in the US and other countries, after OPEC raised oil prices. Volcker raised the federal funds rate in fits and starts to a high of 20% in 1981:
The good news is that these economic problems are entirely the result of bad policies and can be reversed.
If we were to also raise broad based taxes, it would allow the Fed to cut interest rates, stoking long term investment, loosen up the housing market (which would allow more people to move), lower the Federal deficit, and improve the trade balance (as if that actually mattered).
The effect of a bad policy doesn't necessarily end when the policy does. The economy has inertia so some effects, such as inflation, are self-reinforcing and need active undoing even when the policy is relaxed.
At least on the US tariffs thing, congress can put Trump back in his box and revert to normalcy any time it wants to; the threat of stagflation might make it do that. The previous stagflation incident was more driven by outside forces.
I've honestly wondered this too. But we cannot obey in advance. If they're going to try and take it from us, then there should be a fight every step of the way. That means our cynical perspectives, as right as they may be, could lead us into a self-fulfilling prophecy.
I tell myself if there weren’t going to be elections or if the admin had a sure fire way to compromise them, they wouldn’t be trying so hard to push through redistricting in every single state there’s a Republican-controlled state house/senate.
I think it's likely that if there was a rapid reversal, with Congress taking away the power to mess with tariffs and making it clear that it was permanently gone, there'd be some damage, but things would largely go back to normal. Not enough time has really passed for things to change _that_ much; many of the tariffs aren't _actually_ in place yet.
I have some bad news. It's already some 8 months too late for "rapid".
> Not enough time has really passed for things to change _that_ much
Here in Brazil we are in a mini economic boom because every single country is willing to pay a premium on anything that didn't come from the US. The EU is shutting up internal racist and protectionist dissidents (strong on their 2 largest economies) so that they can diversify from you. Most of the world is discussing independent payment systems... Nato countries are organizing to defend against the US and China and Russia are promising military protection to Latin America.
I wonder if things changed that fast when WWI started, but it absolutely never changed that fast in my lifetime.
I'm European, not American. I think that if given strong guarantees that Trump had been declawed, the EC would be happy enough to return to prior arrangements (though probably move ahead with the Mercosur deal and other trade treaties at an accelerated pace, granted).
The world has seen how unreliable the US is. Its not even just the tarrifs, its the tarrifs applied at random, based on how happy the Don is. The world has seen the "checks and balances" don't exist, a populist leader can do whatever they want for any reason and has no accountability.
In this case, there are laws which he claims allow him to do what he's doing (some disagree, and that's moving through the courts, though with the current Supreme Court who knows). Those laws _can be revoked_, though. The meme that congress is powerless against him is not really entirely correct.
The supereme court seems quite happy to do whatever the president wants through the one-two punch of fake emergency declarations and shadow docket decisions...
And then we have Japan, which has spent 30+ years in the economic doldrums.
What I'm saying is that these types of systems have "inertia" and can be exceptionally long lived in their 'bad' state, regardless of the policies used to try to get them out of that state.
I want you to think about, for a minute, the notion that you can have a number bigger than all of the atoms in the universe :-). From that, you can see that its possible to have more 'dollars' than there are atoms in the universe. Specifically, without defining 'growth' you can't reason about the limits on that growth.
The other point that simplified analysis fails to consider is that you are inside the system so as it "grows", it also "changes". If you lived in the 70's with the tales of how we're going to run out of fossil fuels by 2000, looking back you can see how things changed (cars got more efficient, other sources were discovered, etc).
My macroeconomics professor had a funny saying that you could take any segment of a sinusoid and use that to extrapolate forward and get the wrong answer about what the waveform was going to do. In my differential equations class we got to see how you could predict some things if you new both the initial conditions and you continued to refine your model. But to predict all things your model needed to take into account all variables and their impact, and it was the unknown variable problem that messed up predictions using that method.
> its possible to have more 'dollars' than there are atoms in the universe
We are absolutely not printing money fast enough to realize this dream, unfortunately. I propose we mint a new bill, the 100 trillion non-Zimbabwe dollar, and 10x our printing speed.
Yeah, that would do it. Actually though it's important to remember that 'dollars' and 'currency' are two related but very different things. :-) I'm gonna guess you already know that too.
The Trillion Dollar Coin[1] was a real thing oddly. And I have always wondered if was the inspiration for Sam Bankman-frieid's crypto scam with FTX to mint your own crypto token that you could claim was worth billions so that your ledgers added up "in theory."
That implies that economic activity is confined to this planet. Even today we can see this doesn't hold true as we already have activity in orbit. Also, economic activity is less and less tied to physical constraints as technology progresses and digitization spreads.
If I sell you a banana for $1, and you sell it back to me for $1, we have just created $2 of GDP. The trick is we need to repeat this process faster and faster over time. Luckily computers also get faster every year due to Moore’s law, so growth shouldn’t be an issue.
In fact, every person in the country could take turns with the banana for a brief period of time (provided they quickly sell it to the next person) which should enable broad prosperity for all.
Yeah but there is no actual value generated by passing the banana through the population. It's fictional growth, backed by nothing, the same sort of swindle that shitcoin creators do to pump up their shitcoin's value ("wash trading").
There will be no broad prosperity for all from that banana trading, all it serves is to further pump the inflatable house, and it will eventually pop and leave people to realize they've been conned by "financial engineers". And then, the pitchforks will come out.
I agree. And if landlords decide to hike rents by 10% this year and people pay it, the GDP contribution from rent rises 10% despite the actual quality of the housing stock being worse due to being a year older. So you can see why GDP is a kind of silly metric of productivity or well-being.
I understand this set of comments is a digression but there is an interesting subtlety here. There is a structural connection between economic activity (in particular 'innovation') and wealth inequality. Economies that are 'stable' and 'unchanging' become stratified and people living in those economies find themselves getting slotted into 'classes' from which they cannot change.
Since I tend to be interested in systems, especially emergent ones, this is something I find interesting but recognize that the world generally considers economists more boring than accountants :-). When one discusses the 'graph going up' or 'growth' is that prices? GDP? Employment? Opportunity? I've been in conversations where several different definitions of 'growth' were being used that got confusing because there wasn't an agreement on what the y axis was measuring.
Most boomers I know don’t deny the climate is changing — they can (quite literally) feel it in their bones.
What they’re less convinced about is what to do about it. I agree with those who say we need to do practical preparation for the inevitable consequences rather than try to turn back the clock in a fit of fear and futility.
Norway can exit oil today and return its entire population to pre-WW2 poverty and last time I checked the effect on the world’s climate would be a .1% reduction in Co2 emissions, rounded up.
Meanwhile nobody, and least not a western country, is going to tell India and China to reverse course back into the obscurity of underdevelopment.
So any sane conclusion is that oil will eventually run out, so let’s use it as efficiently as possible to prepare for the inevitable change in climate we’re already seeing, regardless of its cause because it’s an unstoppable object.
And a lot of other things that are never going to happen
It will take a decade to dig out of this hole
And then there will be 11 million people "disappeared" from labor market
They are on a crime-spree, you don't do this much damage without malice
Look at what they are doing to the WhiteHouse Oval Office, Rose Garden, ballroom, look at the BILLION dollars stolen from nuclear missile maintenance for a personal jumbo jet, etc. etc.
> This means people are okay with whatever is happening
Or it means the game has been rigged which is exactly the point of all the gerrymandering going on right now. Tons of people are not okay with what is happening but their power to replace their government representative has been or is currently being effectively stolen from them.
We survived with 30% inflation ok key goods during the Biden years due to endless spending, we’ll survive this one too. You’re welcome to short the market though if you feel strongly otherwise
"Biden years" is doing even more work. The suicide cultists generally ignore the trillions in helicopter money that was dumped into the economy under Trump's "watch", right when we were also dealing with supply shortages. It took a few years for the economy to start moving and that new money to go from asset prices into consumer prices, right in time for short memories to blame JOEBIDEN.
If a new face can reverse policy on a dime, then that reversal can be reversed a couple of years later.
It's amazing how few people seem to understand this. Countries are oil tankers, they take years to turn even a little - and that's a good thing. In 2000 the world broadly knew what was going to happen, Gore and BushII would implement pretty much the same policies. Same thing in 2008 when it was McCain and Obama.
Sure you get some minor tweaks to policies which don't really affect much in aggregate.
Even in 2016 Trump was unable to make massive changes, because the state is built to prevent that from happening. The US does not elect a monarch. Things take forever by design, and it's really frustrating when you want it, but it also means one person or one administration can't make a major impact, it takes a generation of pushing the overton window in the direction.
Once you break that, you have a jetski zipping around, then you can't rely on stability, it becomes riskier to invest than investing in a country with a dictator.
It is a constitutional monarchy with an elected, time-limited king.
Monarchies generally have (and had) lots of checks on the king's power. Not necessarily the kinds of checks we would like, of course. The rights of the nobility were well-protected, the rights of landless commoners were not.
No, it's really not. The Executive does not have these powers in the constitution. They made it up and assigned it to themselves by loosely interpreting things how they wanted.
Executive orders are memos, not laws. The President has no power for legislation or budget or tariffing. We're supposed to require legislative review of any emergency actions, like using the military.
This is what’s so dangerous about the game the Republicans are playing. They are perpetuating a belief that American society is broken by breaking it themselves. If the blinders ever come off their base the violent impulses will be directed at them the same way they were directed at Mike Pence. It’s phenomenally stupid to wind up an ignorant mob and think you can control it. The only way to maintain control is to make the mob angrier and angrier but there’s always a breaking point.
Somehow you’re wrong somewhere between two and 3 times in one sentence.
> It is a constitutional monarchy with an elected, time-limited king.
> Constitutional monarchy, also known as limited monarchy, parliamentary monarchy or democratic monarchy, is a form of monarchy in which the monarch exercises their authority in accordance with a constitution and is not alone in making decisions.[1][2][3] Constitutional monarchies differ from absolute monarchies (in which a monarch is the only decision-maker) in that they are bound to exercise powers and authorities within limits prescribed by an established legal framework. A constitutional monarch in a parliamentary democracy is a hereditary symbolic head of state (who may be an emperor, king or queen, prince or grand duke) who mainly performs representative and civic roles but does not exercise executive or policy-making power.[4]
> but does not exercise executive or policy-making power
This is largely but not entirely true. It's also largely true by convention/Realpolitik ("try and exercise your powers and see how long you stay king!") and not by law.
> absolute monarchies (in which a monarch is the only decision-maker)
The monarch was essentially never the only decision maker in absolute monarchies. Nominally, yes. In practice, not at all. Going against too many established interested was seriously bad for the monarch's health.
Zoning is the bigger issue than interest rates with the housing market. Most hand over fist growth happened in our cities when there were higher interest rates but also plenty of zoned capacity. Zoned capacity is barely ahead of present population in cities with exorbitant housing prices today.
For starters we have cancelling and ripping up clean energy projects, introducing serious uncertainty about tarrifs, increasing unease for any immigrant (and even non-white citizens).
Avg monthly "clean energy" jobs so far:
- 2023: ~3.38M
- 2024: ~3.45M
- 2025: ~3.42M
Any impact to the economy due to "green job project cancellations" wouldn't have surfaced yet.
Uncertainty about tariffs: it was already on the books to earn $2.3T (conventional) / $1.5T (dynamic) over the next 10yrs, and inflation is far more under control than it was last year despite the tariffs. Of course legal challenges have disrupted it now. This is also completely ignoring the massive investment foreign countries/companies are making on US Soil to employ US employees.
Edit: having said that, "these economic problems are ENTIRELY the result of bad policies". That's a very bold claim, which warrants some strong evidence. No one has provided any strong evidence that it's ENTIRELY from bad policies.
I don't the current economy is "entirely" the result of bad policy, but I do think it is the primary contributor. I read/listen to a lot of economic commentators as an interest of mine, and there is pretty broad agreement that tariffs are the main cause of inflation failing to tick down to target this year. There also seems to be consensus that the manufacturing sector has been harmed by tariffs and immigration policy rather than helped.
In my opinion, the AI hype cycle has temporarily buoyed the economy from more serious pain. If significant economic gains aren't realized from it soon I think we'll begin to see that pull back.
I do, however, think a return to ZIRP by the Fed would result in a significant economic boost. Psychologically, everyone remembers how advantageous low interest rates are and I think it could result in real investor/borrower optimism, temporarily, if we go back to that. Unfortunately, that would likely mainly stimulate the demand side of the economy, and not as much supply. I don't have high hopes for how that would affect inflation.
Yes, no major disagreement here. You can also point to the Us debt/deficit as another major storm cloud on the horizon. Trump is the worst offender on that, but far from the only one.
I'm as anti-trump as anyone. He's doing tremendous harm to our economy and our society. Your anger is making you see things that aren't there. All I did was question the assumption that our economic problems are ENTIRELY the result of bad policy. Some how you jumped to some very wrong conclusions based on that tiny shred of information which wasn't even about Trump.
You coyly suggested that there were other contributors at play to multiple people who suggested what bad policies are causing the economic issues and then didn’t provide them until called out.
You’re running partisan defense when you act that way
> The good news is that these economic problems are entirely the result of bad policies and can be reversed.
I think one danger for western countries is having governments that just move from one bad policy of one kind to a bad policy from the other end of the political spectrum. Look at what’s happened recently with resignations at the highest levels of government in multiple countries. And in America, if Trump gets replaced by someone who is put forth as a reaction to him, are they going to really do any good? Even if they had great policies, they’d be in danger of being undone a few years later. There isn’t the same guarantee of consistent forward progress that a country of China seems to be enjoying.
There will be no "reaction" to Trump, because all such policies would be struck down by the SCOTUS. This version of America is the one we're going to live in for a while.
Strictly speaking, Volcker caused two recessions (the first of which likely ended Carter's re-election prospects).
Although raising interest rates tamped down inflation on the demand side, we don't give enough credit to Carter for attacking the supply side by deregulating energy markets.
Carter typically doesn't get credit because prices didn't really ease until he was out of office. However, it looks like energy prices wouldn't have decreased if Carter hadn't deregulated the oil and gas industry, which allowed domestic producers to become competitive. (Ironically, Carter thought deregulation would raise prices and foster a move to alternative energy. Instead we got shale oil and fracking. Unintended consequences.)
This post is right about some things, including the general solution to staglation, and wrong about others. Paul Volker was Fed Chair between 1979 and 1987, not 1973. The 1973 crash and recession were not caused by his actions, if you had to pick a single cause, I think Opec would be it.
The interest rates were wild in 1982. My dad said that no one would lend for a mortgage, and we ended up doing seller financing to buy my childhood home.
Also, not enough people talk about housing prices in high interest rate environments. Mortgage payments are the thing that tether housing prices, and act as a lever. We see it today with just an extra 4% with low housing volume and people reluctant to sell, because then they’d need a new mortgage at the new rate. People who would like to downsize don’t since their mortgage payments often ends up similar.
I remember my parents being excited about the opportunity to refinance their mortgage to something in the high teens. And now these days headlines act like the apocalypse is occurring when mortgage rates are in the 6-7 range.
They really aren't. To pay off a 30yr 300k at 4% you pay $17350 a year.
If you pay $17350 on a 100k 16% mortgage you pay it off in under 18 years and have saving of 222k (even at 0% returns) + 100k house by the time 30yrs is up.
The argument would be that after 30 years of 2.3%/yr inflation, the 300k house would be worth 600k in future dollars, and the 100k house would be worth 200k.
However as 15% interest rates implies an inflation rate far higher than 2.3% that argument breaks. With 7% inflation on a 100k house it's worth 760k after 30 years, more than the 600k in the 300k range.
Of course what that means in terms of big macs you can buy is different.
Not only that but if your salary keeps up with inflation, and you overpay the mortgage, you'll have cleared the 100k/7% inflation mortgage in 10 years but it will take 18 years to clear the 300k mortgage.
Sure, having your wage not decrease in real terms is a different challenge, but if that does happen then you're far better off with the 15% interest rate situation.
If inflation is lower than the rate the federal reserve hikes rates to, you can ride out stagflation in money market funds and other types of income-generating investments. The real pain is when it doesn't. Stocks decline, cash declines, and there really is nowhere to hide. TIPS? I-bonds? Both are indexed to the CPI, which policymakers have loudly signaled they are okay gaming and manipulating for political favour.
You’re vastly underestimating the income and political effects of stagflation. Historically speaking, one doesn’t ride it out. It’s fixed fast or the system collapses.
I heard Volcker speak once, you could still see him remembering how hated he was for those years of the Volcker Shock on his face. Strained and a little sad.
As he raised the federal fund rate to 20%, Volcker became widely hated indeed. Businesses and consumers suffered because of his actions.
Politicians of course tried to take control of the Fed. They also tried to fire him. At one point he needed Secret Service protection. Here's an article from the 1980's about it:
Today's economy is all about politics. There are people who still hold out hope or confuse economic data with economist. Populism >>>> good policy. No one wants to be the next Volcker. So, this is likely going to stagflation. I hope I am wrong because this can be ripple effects all over the world.
There's a theory that changing regulation Q to uncap interest rates on savings accounts had more to do with ending stagflation than the fed funds rate hikes.
I'm not smart enough to fully evaluate if that's true, but it was an interesting theory to me at least.
So uh, I'm the first person in my family to break the cycle of poverty. I have nobody I trust to follow advise with money. I do all the 'standard' boring investment strategies (401, index funds, roth, etc). I don't bother with crypto (scams). What does one do if stagflation is coming? Float more cash? Buy real estate?
He goes completely off the rails in the very first sentence: It is no longer a secret that stocks, like bonds, do poorly in an inflationary environment.
He's talking about a time period when the stock market was in the doldrums and inflation was high. Right now inflation is considered high (even though it isn't really, historically) and the stock market is berserk.
And why wouldn't the stock market be considered a valid investment in the presence of inflation? Where else are you supposed to park your cash if you want to outperform TIPS? Remember that in the 1970s there basically was no retail stock market compared to what we have now, where everyone and their dog has a 401(k) and trading is basically free.
Even if valid, his point doesn't seem relevant. It is going to be hard to apply any lessons from the 1970s to what we're facing now, when incompetent and erratic policymakers are driving the US economic picture rather than external influences like OPEC and Viet Nam. (And if we thought OPEC was a malevolent cartel, just wait'll the rest of the world starts forging its own trade agreements without inviting us to participate.)
You acknowledge inflation isn't high by historical standards yet went on to argue he's wrong because stocks went up when inflation wasn't high by historical standards?
The last time we had sudden unexpected high inflation was 2022 and stocks crashed did they not?
Bear market, temporary downturn, whatever. It was not a "crash" by any sane definition of the word, and it had little or nothing to do with inflation. Otherwise we'd see the same correlation at other times when inflation has spiked.
U.S. dollar loses value, property depreciates (no one can afford payments) and equities have their P/E ratios slammed (and we are at all-time historic highs...)
So the solution historically has been stable goods. Gold is the historic standard, but probably Bitcoin now as well. Possibly foreign stocks/currencies. But since everything is so interlinked now with pensions and 401ks that the financial world is far different place than the 70s. If you really want a safe bet, it's that there will be a fair bit of volatility and every asset class will have more risk with spikes up and down. All of this depends heavily on how the U.S. responds along the way.
Basically anything but hold cash, at least until interest rates are forcibly pushed to the moon to try to break out of stagflation. Assuming you can avoid selling whatever you've bought until the other side.
[EDIT] If you think we're in for a long period (decades) in which nobody will do what's needed to break out of stagflation and we're going to head the way of various inflationary South American economies over the past century, I guess look at Europe? IDK, it'll be bad everywhere if that happens.
This time won’t be like the last. The point of such episodes is to destroy capital. A rational response would be to de-lever before everyone else. Focus on the meaningful and the productive in the near-term, disregard promises about the future.
If you’re aggressive, issue long-term, fixed rate debt and buy whatever you think everyone else will view as personally meaningful or currently-productive, provided someone didn’t beat you to it.
Arguably we’re 40 years into the “cash is trash” trade so everyone is in a little bit of suspense what happens next.
Bogleheads [1] gives better financial advice than HN. Every time I peruse some threads there, I learn something new about personal finance I didn't know about.
Gold, make sure your debts are low, trim expenses now. Start thinking long term, what things will you need 5-10 years from now that will only be much more expensive or hard to get.
If we are heading into a period of high inflation and interest rates, holding debt now is great. High unexpected inflation means that the dollars that you use to pay off the debt are worth less, and you are locked in to a low interest rate.
The ideal circumstance would be to take out a loan you can’t really afford immediately before a round of hyperinflation. Bad time to have $100K in a savings account. Great time to owe that bank $2M.
Outside of the standard theme park with blackjack and hookers, you could pick up a race horse. Those can start in the low six figures up to tens of millions. Although if you want to race, do not blow the entire amount on just the horse, because the training + food + maintenance is also going to have some hefty bills.
That depends - if you are good at timing the market you would sell your stocks at the peak, put it into cash for a year or two and then buy long term low risk, high interest rates bonds that cannot be called... Too bad I don't know anyone who can time the market. (I'm not confident that stocks will start falling before the bond rate peaks, even though that is my guess).
My guess is that real estate will not do well in general. However there are always exceptions, but I don't know if the exception is in Dallas Texas (random big city), or Chaseley North Dakota (random place not even a town, cannot support even one store)
Real assets like precious metals, commodities, real estate should do well during stagflation. I think crypto (mainstream ones, not fringe) should be doing well too IMHO, despite the skeptics.
If people can't afford the rents then they'll just cram more people in. Currently have a "Joey/Chandler" style apartment form friends with 2 people in for $4k/month? Now you get 4. Or 6. Price increases to $6k/month but it's down on a per-person basis.
In some cities you get time-sharing beds. In 2003 I lived (for 3 weeks) in a house in London, I had my own room - the largest in the house. A smaller room had a couple with a baby, the loft had 3 mattresses in it but 4 people living there, time-sharing with the mattresses like you have in a nuclear submarine.
There's plenty of opportunity for landlords to increases costs even if peoples incomes can't support an increase.
Well there is another issue: trust in the dollar is waning, so central banks have been buying gold. If Trump messes too much with the fed's independence, this can only get worse.. One source theorizes that his admin. is doing this not so much to lower interest rates, but to get the fed to reduce interest it pays to banks for money they keep at the fed (a thing that started after the GFC). The idea is that then the banks would buy treasuries instead, which might reduce the debt payment burden on the government.
Anyway... gold is all about wealth preservation, not growth, so I don't know what to tell you. But it is up 44% over the last year.
Well if you were following sound financial advice and understand the economics from an Austrian perspective you'd likely be diversified into several equal buckets with one of those buckets designed to offset the losses. You do this when it doesn't matter because you can never time the market. No one can.
In the case of inflation/stagflation it would be physical assets that increase in value under such circumstances. Gold/Silver meet this, as do many other assets. Under such environments counterparty-risk must be carefully evaluated.
All of your mentioned standard strategies have opaque and significant banking counter-party risk. There are also details such as the YTM loophole where the assets you hold may not have been marked to market (when interest rates go up).
This is particularly true of any bonds, or bond backed securities, and the leverage involved in many such markets is next to impossible to discern, and as a result the average advice of passive investment breaks down towards losses in the near term but not long-term.
None of this is financial advice, just reiterating things people should already know about. The stock market's synthetic share problem coupled with dark pools, and the commodity market's (COMEX) fail to delivers and failure to loadout (physical delivery), are things to know about. Unspecified risk from bad actors.
Its all paper with substantial counter-party risk until you hold it in your hands.
Markets currently don't expect significantly higher inflation in the long term, as the "10 year breakeven inflation rate" ("The latest value implies what market participants expect inflation to be in the next 10 years, on average.") is fairly stable: https://fred.stlouisfed.org/series/T10YIE By my understanding, this is supposed to trend towards 2.0% when everything is hunky-dory; things are not perfect, but they look fine to me in historical perspective. Similarly for e.g. this 5-year forward chart: https://fred.stlouisfed.org/series/T5YIFR
> Raising rates to put stress on businesses and consumers is the only method known to work for ending self-reinforcing high inflation
Yes, and that's how we made sure that the inflation peak in 2022 didn't become self-reinforcing. And as far as anyone seems to be able to tell, it worked.
> It's what Paul Volcker did at the Federal Reserve in response to the stagflation that started in the early 1970's in the US and other countries, after OPEC raised oil prices. Volcker raised the federal funds rate in fits and starts to a high of 20% in 1981:
Right. Current circumstances are very different. Posting this much about what you "hope doesn't happen" comes across as fear-mongering, given the lack of reason to expect it to happen. The tariff discourse allows people to throw around large, scary-sounding percentages, but in practice the corresponding price increases are on average much smaller. And the employment situation in the US is still very good in historical terms. (There are valid concerns about the methodology behind the headline unemployment rate, but it's still the same methodology.)
> And the employment situation in the US is still very good in historical terms. (There are valid concerns about the methodology behind the headline unemployment rate, but it's still the same methodology.)
I should add: historically, increases in the unemployment rate have a tendency to accelerate and then produce a spike, which is then brought under control by some other mechanism, and tends to correspond with a recession. But this is just the normal boom-bust cycle, and seems rather unavoidable. The rate can't keep going down forever, and having it level out doesn't seem feasible, either. The magnitude of such a spike doesn't necessarily indicate the severity of economic downturn, either.
To the extent I come across as doubtful and concerned, it is only due to recent firsthand experiences buying food, clothes, and electronics. My perception is that prices are still rising in many product categories. Anecdotal evidence is not data, so I can't and won't make a prediction, but I think it's fair for me to express doubt and concern.
All I know for certain is that we'll find out as more data becomes available.
> the Federal Reserve would be forced to raise interest rates
That's just not happening, no matter what happens.
The President is obsessed with lowering rates, because it personally enriches him, regardless of how it affects the economy. The cronies he has in line to replace Powell and the SCOTUS seeming like they'll back his unlawful removal of the Fed governors he doesn't like, means the independence of the Fed is guaranteed dead in, at most, 2026.
The businesses that should be pushing back just... Aren't? 5 billionaires just had a foot-kissing session with Trump. Law firms are capitulating. Most education institutions are capitulating. Companies would rather bribe Trump with gold statues (Apple) for their own short-term kickback than speak up even a tiny bit to prevent a mid-term economic collapse.
I genuinely don't see the US avoiding a self-inflicted (global) depression anymore.
I've been saying this same thing for awhile, the problem is a lot of sentiment bots have been downvoting it out of view within 24 hours, taking karma as they go. Yesterday lost 10 points for a single post same subject, basically the same as yours.
There are a number of subjects now where its almost to the point where any discussion is fruitless because anyone talking is getting punished by third-parties, and moderation aint doing a thing about them.
Your right it will be real bad, much worse than before because most of the Volcker recovery was on the back of the global adoption of the petrodollar. The situation is the exact opposite today where you not only have petrodollar pools of money coming back domestically but also runaway government spending.
If you compare our modern economics with that of Argentina over the past 100 years, we seem to be following the same policy pitfalls. These things largely only happen because of excessive money-printing under fiat, certain government policy and regulation can cause it as well.
Its hard to ascribe individual responsibility in that way when the only two choices were existentially awful.
"You elected an idiot president...", the choices were Communism, or Fascism; which is recoverable and better for people. Certainly not the former, but to be clear neither are a real choice when you vote for democracy, and not voting is a vote for both fascism/communism at the same time.
Such was a similar failure and rise of demagogues that ruined Rome.
First-passed-the-post voting is fundamentally flawed, and so is ranked choice...
> First-passed-the-post voting is fundamentally flawed, and so is ranked choice...
What voting system so you think is best? None are perfect but IMO ranked choice is the best as it keeps the good attributes of FPTP without suffering from the spoiler effect
When most people say "ranked choice" they seem to refer to IRV, which is broken in multiple ways, but most notably that it has the property that ranking someone higher can make them lose and ranking someone lower can make them win. That happens because IRV ignores all of someone's preferences except their top choice, until their top choice is thrown out, at which point IRV looks at their next preference.
There are much better systems: approval (for simplicity, at the expense of more accurate preference information) and Condorcet (for accuracy, at the expense of making it more difficult to explain tie-breaker corner cases to the average person).
Ranked Choice Voting (aka Instant Runoff Voting) is the single worst of the very many seriously proposed ranked ballots method; it retains most of what is bad about FPTP. It is somewhat easier to tally than the best (in terms of the logic of who wins) ranked ballots methods (methods satisfying the Condorcet criterion), but not particularly good even on that among all ranked ballots methods, e.g., it can be improved in that dimension by just adding all preferences of the next rank until a candidate crosses the maiority threshold without elimination, which also reduces the degree to which the system is prone to paradoxical effects (promoting a candidate causing them to lose by changing the order others are eliminated.)
Harris wasn’t anything. She said what the writers of her script wrote just like Biden. This is the dems fault for failure to build a next generation of leadership.
Well, you should stop being evil and rather be specific and unambiguous in what you are communicating instead of the vile sort of things you are doing; that is only if you want to demonstrate you are operating from a place of good faith and earnest sincerity.
The absence of such specificity in general correspondence following such is both admission and confession.
Most of what was said is strongly supported by established facts. What you say is just your hollow-opinion and downvote power to muzzle.
As far as I can tell you are simply play-acting and utilizing common tactics found in political warfare, what most people call "Identity Politics" or political nullification, where you label someone as part of a group falsely, and then use that group as false justification to disregard/nullify anything they may say in their defense while continuing to criticize and gaslight through distorted reflected appraisal you create in a purposeful trauma loop.
Just so you know, if you haven't figured it out yet I'm at a point where downvotes aren't going to muzzle me because you don't muzzle truth and rational thought and remain a good person.
The circumstance described is ironically distinctly different though seemingly similar from risk management in existential situations given the absence of information but presence of strong indicators supporting a likelihood (children often are just like their parents). There are many places where recognizing nuance is important.
While I conveyed a risk assessment, you are doing so with the effect to attack the person exercising their rights to convey truths through speech and idea. I find that morally bankrupt and reprehensible.
Be specific about what you call people, and the things you call insane, most would say this reasoning is quite conservative given the risk, known knowns and known unknowns that directly go to character, and by extension outcome.
We live in a world of mutually assured destruction, what happens when crazy people call the rational people crazy, purge them, and get themselves into a position to push that proverbial button. MAD doesn't work under the irrational and insane. Its far easier to destroy than to create, and evil people don't even realize that is what they are doing through small, mindless but iterative action ever marching forward to a single unthinkable outcome. Extinction is a very real possibility that few deeply consider the ramifications of.
Discerning people fact check for credibility both with words and in context, and liars of the most vile kind eventually must pay the piper in the consequences they set in motion through their own choices and action. The same goes for platforms that through design choice of systems, emerge outcomes that discard truth/reason promoting disunity, falsehoods and deception. There's a reason there's a growing movement of people leaving HN.
The crazies often don't recognize that they are crazy unfortunately, and they certainly don't base their communications or reasoning on objective measurable support or established facts.
I am legitimately surprised that someone who can write complete and cogent sentences believes that a vote for one of the two presidential candidates was a vote for communism.
Last administration cooked the books on BLS numbers for nearly 2 years, issuing corrections and all that nobody paid attention to. They also redefined what a recession is during the last administration.
Because of debt spending, everyone wants to act like we did something amazing. We didn’t, we just pumped in more debt and the economy went up. We are now even more in the red as a nation
Trump is incompetent at best (a crony at worst), a bull in the legislative China shop, and revels in drawing attention to himself... so it shouldn't be too surprising people are on high alert during his tenure and news headlines get more attention.
Last administration cooked the books on BLS numbers for nearly 2 years
I'm going to need to see a citation for such a claim...
Not the GP, but here is an analysis of the BLS data arguing the opposite[0]. Short answer, BLS data gets revised all the time and the supposedly smoking gun revision that was used to justify firing the BLS head was not even in the top 50 most extreme corrections.
Incentivize our basic necessities and come down hard on fraud. If a bridge needs to be rebuilt pay to have it done. If shipping infrastructure needs to be modernized pay to have it done. If we need more mining get it done. Get it done and get it done fast. If bids are won but they go and fuck all the money away send them to jail. This is how stuff worked before people became obsessed with metrics.
So just for one example, the Bureau of Labor Statistics started publishing jobs reports in 1915. But having monthly jobs reports on the cotton sector lead to increased fraud and stopped bridges from being built?
What's the mechanism? People are distracted by the amount of cotton production, which is the perfect time to falsify an earnings report?
How long were supply chains back then? 2-5 nodes in a typical case?
I'm not saying publishing of statistics is what caused this shit to happen dingus. I'm saying focusing on it exclusively is dumb and it is wiser to look at a granular level. We can't look at this level because once you have a 150 node supply chain how trustworthy are the receipts?
What if your body had a metric as dumb as our high level economic metrics. We'd all be doing our best to get fat as fuck.
I think you have a point, at the resolution of personal liability shit is and has been cooked. Without being able to hold people to account for their misdeeds, misdeeds are de facto allowed and especially when you can obfuscate information. It's Goodhart's law in action, the sector looks good because we're shooting for targets in a heuristic measure but the reality is glum.
Worse is when fundamentals are [effectively] meaningless and everyone is a betting and hoping to pass it on to the greatest fool, even worse when that greater fool is the general public who are too with their own lives to fixate on the intractable nuances of the effects that Algerian hornet slayers are having on the price of tangerines which is buoying banana prices in Rwanada because legislation was passed last week in Kentucky.
Paradoxically, scale and complexity, but also psuedocomplexity (read:obscurantism) drive us towards these heuristics and effectively incentivise deeper cycles of Goodhart derangement. I expect this is a peculiar aspect of America's largess, though. The American cultural diaspora is actually pretty diverse from my experience.
Thank you. I don't know if my point is any good but you understood what I was trying to get across with my general frustration with how our economy is managed and discussed.
> If a bridge needs to be rebuilt pay to have it done. If shipping infrastructure needs to be modernized pay to have it done
This is what they did in Weimar Germany, Erdogan’s Turkey and Argentina. You’re describing massive deficit spending and inflation.
> If bids are won but they go and fuck all the money away send them to jail
Add in Ba’athist Iraq.
Also, guess what you do to fuck over your competitors in this system? You sabotage their supply chains. The politically connected wind up with all the tenders because they’re the only ones who can build.
> This is how stuff worked before people became obsessed with metrics
Literally never how it has worked in any functioning society. When you see this sort of strong arming, it describes a society in decline. The Late Roman Empire. The British in Suez. The French in Indochine. The Russians in Ukraine.
How do you sabotage your competitors supply line without sabotaging your own? Seems like it would be mitigated quite effectively by strong anti-trust enforcement. If a corporate empire is so diversified then it should be broken up in separate entities.
How was it done in the US during WWII and in the following few decades? I guess that was just command done therightway(TM) like China does today?
Is jailing fraudsters really the equivalent of some failed Iragi regime? I think you could make a better argument.
What do you think should be done about the state of the USA economy? Do you even see any problems that need addressing? I have a feeling venture capitalists see wildly different incentives from the laborers.
You do know economic data is not used only by "economists", right? Given that you seem to dislike the word "economic" data, focus only on the data part. Tell us how politicians/policy makers run the country without data? How do they know rates have to be increased/decreased if they don't have such numbers? Through wishful and magical thinking about focusing on the basics?
My point is that it should be more granular. I only ever hear it described in one of three things in tension with each other: markets, jobs, inflation. Do you think you can just watch those three things and guide a country/world into a prosperous one or could there be pitfalls?
I think it's interesting that everyone's immediate reaction now-a-days is to assume incompetence or maliciousness, rather than curiosity at the root cause (very telling this attitude has even permeated a forum for supposed 'hackers').
A high-level is that 80% of the economy is very easy to track b/c it's not very volatile (teachers, for example).
What we have seen is a huge surge in unpredictability in the most volatile 20% of jobs (mining, manufacturing, retail, etc.). The BLS can't really change their methods to catch up with this change for classic backwards compatibility and tech debt reasons.
Part of the reason 'being a quant' is so hot right now is that we truly are in weird times where volatility is much higher than most people realize across sectors of the economy (i.e. AI is changing formerly rock-solid SWE employment trends, tariffs/electricity are quickly and randomly changing domestic manufacturing profitability, etc.). This means that if you can build systems that track data better than the old official systems, you can make some decent money investing against your knowledge.
I think this is a bad state of affairs, but I don't have a good solution. Any private company won't release their data b/c it's too valuable and I am reluctant to encourage the BLS to rip up their methods when backwards compatibility is a feature worth saving.
Is there really more volatility? My gut feeling is that government interventions have flattened it over recent decades. I’d like to see some real figures on this.
Manufacturing and mining are becoming much less correlated to the overall jobs market (likely, as you point out, b/c the government smooths the other sectors).
Can you actually prove volatility is higher now than in the past? There have been plenty of volatile changes in the workforce over the past several decades, this is not anything new to the job market.
> interesting that everyone's immediate reaction now-a-days is to assume incompetence or maliciousness, rather than curiosity at the root cause
I came across this claim last week regarding recent US jobs figures:
> "All jobs gains were part time. Full-time jobs: -357K. Part-time jobs: +597K"
If this claim is true, and I have no means to tell if it is, then - regardless of one's view on whoever is in power right now - do we really expect any elected representatives to be brave enough to say that out loud at a press conference?
Explain to me please why job numbers aren’t simply a matter of querying the Federal social security database? A longstanding process of polling businesses for what they want to report, followed by corrections up to one year later, has got to be a pantomime to fudge the numbers.
Does that pass the basic common sense smell test? Everyone can see on their paycheck the amount, that is paid 30 days after any work day in the worst case. These payments are sent to a single federal bank account, and data-wise are combined with Social Security ID, sending bank id, date. It’s a bank, there’s a database. We are talking at most about 200mm records, a raspberry pi can process that query in minutes. If we can’t query this easily it’s by design. Or we could do some backflips and somersaults to try to come up with a reason for why the bureaucracy has to be more complicated.
The payments are deposited monthly or semiweekly (for employers with large payroll) but that's a lump sum. If you are looking at that from the government side all you can tell is whether total payroll has gone up or down. That won't tell if any change is due to a change in number of employees or a change in pay rates or some combination of that.
It isn't until the employer files their quarterly Form 941 that you'd see employment numbers. Form 941 includes the number of employees and total wages and withholding.
It isn't until the annual W-2 filings that you would see a breakdown that includes number of employees and the individual pay.
Not all 'normal income' is from a "job" as we think of it and assuming that does not even come close to passing any informed person's smell test.
Parsing tax or SS payments for what a "job" is would be a logistical nightmare, because that's not what the system is designed for (unlike the BLS's system, which is designed to count jobs).
When ppl want job numbers they want a reliable proxy for the state of the economy. Fixing it on changes to payroll-based social security payments would be far better than what we have now, if timely.
I only see a stat that reports the same number for full employment vs one person who fired them all and took their incomes. Is there a way to disaggregate to get some proxy for employment like we are talking about?
So the answer is payments per social security id are not reported to the social security Electronic Federal Tax Payment System (EFTPS), employers only report aggregate payments. And workers and employers only report payments by individual in W2’s in January.
Probably the only reason is because the BLS and SSA are completely separate, and SSA is probably antiquated and doesn't attempt to tag or organize their data along the same parameters as whatever the BLS defines. It likely neither has the staffing nor resources to provide those hooks and realtime anonymous aggregated data for other departments to consume.
A lot of people don't understand that collecting data is actually expensive and difficult when it doesn't involve surreptitiously stealing it via some piece of tech.
It's not without precedent, but the fact that initial job numbers have been consistently inflated over the last 3 years and that the magnitude of the downwards revisions is on par with 2008-2009 for two years in a row (and growing) is concerning.
The monthly employment numbers the BLS publishes are basically nonsense and I'm sure they wouldn't publish them if Congress didn't force them to. At the middle of every month, they run a survey asking ~120,000 businesses how many employees they had as of the 12th of the month. It takes 8 weeks for all the responses to the survey to come in, but the initial monthly numbers are based off of the first 2 weeks of responses. This initial data is always more representative of larger companies. The BLS then generally issues two corrections to each month's data, one when all the responses to the surveys come in and the other when they get the actual unemployment numbers from quarterly unemployment insurance tax filings.
We see large corrections in employment numbers when there's rapid changes in the job market that mess with the models, or when the changes are focused towards small companies. Right-wingers have somehow decided that all of this is instead due to the BLS somehow being out to get Trump, despite there being no significant changes to how the jobs report is made since the mid-90s.
I’m not sure how the politics play out but a stat that is always off in the same direction, always over and never under, is what some statisticians call “biased.”
You can have non-biased indicators that have error with mean 0.
Maybe a better question, when judging current operations, is how precise the biased estimates are becoming overtime. Is the size of the error increasing or decreasing.
If it's like in my country, it's probably because you have more and more people "self-employed", and the average "small business" went down from 3.8 employees to 2.2 over the last 6 years (made up numbers, but i've read it almost halved which caused a lot of issues).
I think we created a new status for Uber/Deliveroo and other workers to put them out of the category three years ago and it fixed a lot of our employment data issues.
You seem to be under the impression that these figures are exclusively sourced from employers, but they are not. They are sourced in part from a survey of 60,000 households every month, where each household in the the survey for several consecutive months. Here is some information about non-response rate: https://www.bls.gov/cps/methods/response_rates.htm
> You seem to be under the impression that these figures are exclusively sourced from employers, but they are not. They are sourced in part from a survey of 60,000 households every month, where each household in the the survey for several consecutive months
These are two separate metrics, they measure different things, and the figures often differ (unsurprisingly).
The BLS "establishment" survey (aka Current Employment Statistics, CES) surveys 120k+ businesses and government agencies, it measures jobs (not people), counting the number of payroll positions. This is "non-farm payroll employment", excluding the self-employed, farm workers, and private household workers.
The BLS "household" survey (aka Current Population Survey, CPS) surveys ~60k households, measuring individuals, whether they are employed, unemployed, or not in the labour force. These data are used to calculate the unemployment rate and labour force participation. This includes farm workers, the self-employed, and domestic workers.
> you fix incentives and hire competent data gatherers
You assume the data gatherers were at fault... <chuckle>
These data gatherers work for their government. How do you ensure they're happy to gather and publish data which is essentially critical of that very government?
I agree, if you can't publish a number that's pretty accurate then you shouldn't publish anything. That's why i wasn't broken hearted when Trump fired that BLS person. If you can't even get close then someone needs to be found that can or at least has the balls to say "idk what the number is, we're not publishing without good data".
On a more serious note, how would one ensure that a government department be sufficiently independent that it can publish data (implicitly) critical of its own political leaders without fear of retribution?
"There's still ongoing chatter about the huge revision to U.S. job growth seen yesterday and what it might signify for the economy and markets. 818,000 jobs were wiped out in the 12 months through March 2024 (or 68,000 per month), resulting in the biggest downward adjustment since the global financial crisis."
DOGE broke it even more. The error bars have always been non-zero. Now the error bars will be even larger than before (unless Trump just outlaws error bars).
That gives context, but lacks the final ~900K downward revision the article is about. If it had been shown, it would be the largest revision on the chart.
The downward revisions were overall a lot bigger than the upward revisions. BLS methodology causes it to get data from larger companies first, and this tends to systemically bias it towards downward revisions
I believe you may correct; the final point is still absent (since the link chart predates the data in the story) and would (I think) continue the downward trend, but by how much is not clear.
(reposting a version of my comment somewhere below)
The BLS (USA) does adjust the numbers every month (for two months after the initial release) and annually. Regardless if the numbers go up or down, this is fairly common with statistics and forecasting in general. When actuals come in, the forecast is adjusted closer to reality.
Anecdotally: It gets lost in the mix of headlines when those adjustments show that the initial projections were on trend, or "close enough the talking heads don't care enough". However, it gets "interesting" when it's off-trend; or confirms prior notable good/bad news. In this case, it confirms* what was suspected, mostly confirms what was reported. As actuals came in, the reality was worse than projected.
*"Confirms" use case here: job growth is poop right now.
The department of labor has a methodology that gives an early number that tends to get revised. They have been doing it the same way for a long time and it would not be controversial, except the business press with too little news to report makes a big deal about it with very little context. So its, like jobs increased 200k (not saying +/- 200k is the error bar). It would be good for everyone if people who are not professional economists paid less attention to this.
It's the best data that's available at the time. It's been collected in a consistent fashion for a significant duration of time. To understand how a new methodology would differ, we'd want to run a new process in parallel for a couple years.
A few notes from an interview on the Odd Lots podcast, interviewing Bill Beach, former head of the BLS:
* Response rates among surveyed employees are roughly:
Month 1 68%
Month 2 83%
Month 3 93-94%
* Large employers tend to respond sooner, and are staffed to handle these requests better.
Trust in the numbers is extremely important and we should all be calling out that we need to trust the numbers and the methodology. It should also be transparent.
However, it's extremely common in forecasting to revise the forecast once actuals come in. In the case of the BLS, it's the documented approach for a very long time.
Every month the numbers are adjusted and annually. All of the notes as to why, the method, etc are in the actual reports*.
*I don't recommend reading them or the footnotes unless you have insomnia. :)
** Also, if the source data is inaccurate, corrupted, etc; if the models are non-transparently adjusted, that would be horrible and cause for alarm. At the moment, we don't know if that is the case. Yet.
They're preliminary figures! The only alternative is for BLS to be less transparent, collecting data and then refusing to release it until they have enough information to construct their final estimate.
Yes, and both William Beach (the one confirmed under Trump in 2019 who served through most of Biden's term) and Erika McEntarfer (the one confirmed under Biden who was just fired by Trump) talked about how they wanted to improve the methodology.
Because these numbers are so important- to journalists, to the Fed, to financial markets, etc. they wanted a few million dollars extra, over a few year period, to run the new methodology and the old methodology side-by-side for a significant portion of a business cycle, to understand the differences before they switched, and to gain confidence in the system. Because an important part of this particular data set is what it signals to those others, it is important not to move quickly with this data set, but to give time for everyone to understand all the nuances. It's things like, how the market views the meaning of corrections would be different under a different system, and so they want time so that they themselves and all those other people whose jobs depend on understanding it to be fully aware.
Basically, they wanted to run a blue-green deployment strategy for their updates, but couldn't get the budget for it- and their budget has instead been cut so far. So they have prioritized continuing the system that everyone understands rather than experimenting with new things that no one understands. Because these are smart, well educated people who spend their entire lives thinking about these problems, and understand how the data is used, this is something they have thought about a lot and want to do the best job they can.
they're regularly revised up or down because they're (very openly) preliminary numbers released just days after the month ends and before many employers have even answered the survey. When the economy reaches an inflection point they tend to be streaky (multiple revisions down or up in a row) but that's nothing new and mostly just means that the economy has been getting worse over the last year and a half, which... that's one of the big arguments for Trump's victory so I'm not sure why it would be a surprise.
Serious question: employers presumably also use DoL numbers to decide whether to invest or cut. Could incorrect initial numbers lead to a self-fulfilling spiral?
Employers use a lot of data. DoL numbers are one, but they are trying to predict their own future needs. They generally have much better sources of data to their industry that are used as well.
Different companies react differently as well. Companies that have a steady flow of cash (food is very inelastic - people eat about the same every day) realize they can give smaller raises, and this is a good time to invest in the company by building so they often hire. Companies that make luxury goods for the common man (think small boats - large yachts for the rich are different) tighten their belts because they are the first place people in fear cut spending.
Not to be a Doomer but the last time I recall a revision around this magnitude was during the GFC[1].
Summary of the benchmark revisions The March 2009 benchmark level for total nonfarm employment is 131,175,000; this figure is 902,000 below the sample-based estimate for March 2009, an adjustment of -0.7 percent. Table 1 shows the total nonfarm percentage benchmark revisions for the past ten years.
People often get hyper-focused on a single cause, but there is a whole range of forces driving a sharp decline in jobs. All of this is visible, yet we are marching toward an economic crisis of our own making. I believe the best term for this is "gray rhino".
* Tariffs and Trade Uncertainty – Elevated tariffs and rapidly shifting trade policies are raising costs for manufacturers and discouraging hiring and investment (Investopedia; Atlanta Fed survey; CBO analyses).
* Automation and AI Displacement – Automation and AI, especially in low-skill occupations, are reducing new job creation and wages for some workers (academic studies in arXiv and PMC).
* Restrictive Immigration Policies – Tightened immigration and visa processes are straining labor supply, particularly in sectors that rely on immigrant workers (Axios, 2025 labor coverage).
* Small Business Strain from Economic Pressure – Tariff-related uncertainty is leading small businesses to slow hiring or lay off employees (Joint Economic Committee report, 2025).
* Offshoring and Outsourcing Trends – Technological advances are enabling offshoring and automation, substituting domestic labor with remote or machine-based alternatives (academic research in World Development, 2024).
if anyone else is curious, beyond all the political football stuff happening with the bureau of labor stats, Odd Lots did a good episode recently on the challenges with monthly jobs reports
Would also recommend the Moody's Talks podcast led by Mark Zandi, the Moody's Analytics chief economist. He's been more or less talking about this for months now and sounded the alarm much earlier than others about this prospect.
I second this. Probably my favorite podcast right now. Interestingly, I admire Mark's guts to make somewhat bold calls early, but I trust the co-hosts' (Marissa, Chris, and Dante) takes a bit more for some reason.
I do not think ADP goes back and adjusts the numbers from its previous reports. I think this is because ADP does not use sampling - ADP uses the actual data from the private companies for which it provides payroll services. With this data is pretty clear, among many other things, how many people were employed at this particular company in this particular geography at this particular time. ADP then aggregates all of this data in its report.
Right -- I guess I'm wondering if ADP figures were lower than BLS figures by a proportionally significant margin (enough to possibly confirm these new values). I haven't been able to find the figures myself.
Austerity has repeatably been shown to kill economic growth and trigger recessions/depressions. Yet for whatever reason there is one party in congress who's entire economic policy is basically austerity measures. Repeatedly, the ax man comes in and cuts spending that generates multiples of economic activity in return. This happens all the time cut a $1 here and it costs $4 over there kinds of things. Infrastructure is frequently in this category, delay maintenance until it can't be repaired, or simply fail to invest until a road/bridge is gridlock 18 hours a day, or the train is to scary to ride. The current admin is doing this 10x because they aren't being smart about what they cut, just doing it for political points.
Is there government waste? Sure, but that requires micro tweaks, aka instead of hiring more TSA agents maybe decide they shouldn't be randomly selecting every 3rd precheck user for additional screening/etc, or maybe decide that investing in even slower scanners isn't the right choice. Plus, in TX having seen some of these contracts the city/state gives out, the idea that private industry is more efficient is laughable. In some cases they are basically contracting out for millions of dollars a year a job that could be handled by one or two actual government employees paid less than $100k a year.
A lot of current conservative grousing about the deficit is priming the electorate for destroying social security. That's why they always highlight it as the main cause of the deficit, even though it has a totally separate income stream from the rest of the budget.
Republicans have done the exact opposite of balancing the budget at least since Reagan (inclusive) non-stop, zero R presidents have even done as well as democrats at pursuing a balanced budget since then, so they're not serious about it, including and perhaps especially Trump—but they really, really want to get their hands on social security, it's so much money out of the hands of rich people that they just can't stand it.
Expect this to get much worse soon. Even left-leaning youth will probably start to agree with the idea of destroying it out of spite, and even if they know it won't actually help them. At some point we'll have to admit, it's not easy to explain why youth need to subsidize things for an older generation that enjoys housing, healthcare, and stocks when they themselves have not had the disposable income for any of that. Scott Galloway has a ted-talk where he calls it generational theft: https://www.youtube.com/watch?v=qEJ4hkpQW8E
No party's platform is based on ending or destroying social security, especially not the GOP who gets a broad base of support from retirees. That being said, I've never had much faith in it being around for myself, though I'm 30 years from eligibility). It's possible that productivity boosts from automation and AI could overtime make SS actually sustainable in spite of overwhelming boomer population to support.
The federal tax revenue as percentage of GDP is remarkably stable regardless of widely varying income tax rates over the decades (ranging 15-20% since the 1940s): https://fred.stlouisfed.org/graph/?g=ockN. This holds up no matter which regime (D or R) is dominant, because the economy reorganizes itself around incentives or disincentives created by various tax policies.
Republicans, including some of the current crop, have been making noise about putting the money in the stock market, one way or another, for a long time, and if anyone’s gonna actually do it it’s these guys.
A reminder to everyone: Social Security is NOT a retirement plan, it is an insurance plan. When your 401(k) is cratered by the stock market or your pension goes the way of Enron, SS is supposed to be there to hopefully keep you from being dumped in the gutter. Tying SS to the stock market would not be a smart move.
You're drawing a semantic distinction that doesn't really exist. Insurance for retirement, retirement funding -- it's all the same thing.
A 100% equities (or 100% Enron) portfolio is not the only or best option available to the SSA. And the SS portfolio can't be panic-sold by the individual retiree in a market downswing. Using equities to achieve some additional upside for SS in one way or another is plausibly a reasonable idea.
> It's possible that productivity boosts from automation and AI could overtime make SS actually sustainable
Social Security is funded entirely by payroll tax deductions and invested only in treasury bonds. Bonds which have had very low yields in this century. Guess what you collect less of as automation and AI ramp up? Payroll taxes.
> This happens all the time cut a $1 here and it costs $4 over there
The thing that makes these policies work, of course, is the $1 is cut from a billionaire's taxes, and the $4 is paid by the rest of us. Voters seem to like this policy, for reasons that are beyond me.
"Austerity" lays the political groundwork for tax cuts for the rich. Austerity never affects military or police budgets though, we're happy to increase the debt to finance those.
Well at least the billionaire class got their massive tax cut, that's what is important. Buying food may get more difficult for the rest of us, but at least Jeff Bezos can buy another megayacht, and I'm happy for him about that.
Me too. Since he migrated his wealth from the place he earned it for thirty years to a tax haven in Florida the realities are different. With warming tropical waters, he will need to spend more money on a yacht that can handle the bigger storms. It's not a problem you or I need to worry about, but he does, and that's probably why he is a billionaire and I'm not.
the economic impact of everyone knowing you can't trust government data on the economy is gonna be fun to watch. they can pretend, and they can make us pretend, but they can't make us forget that we're pretending.
Why doesn't BLS use data directly from Social Security?
Everyone with a W2 pays into SS. SS also has everyone's birthdate, so it's easy to bucketize everyone into "can work" and "can't work."
They can join that with Medicare/Medicaid data to find people with disabilities. The can compare pay periods to see who's unemployed etc. They can find people on disability with help from Medicare.
Why is BLS waiting for state data? To find the unemployed and collecting?
The revisions cover March 2024 through March 2025. While his policies may deliver turmoil in the near future, I don’t understand why most of the discussion here is about Trump. Furthermore, these revisions are at the high end of estimates, so it’s not a complete shock. The Fed and financial institutions must have already had an idea that the job market could be this bad.
I think our society has become so efficient that we definitely need Bullshit jobs to keep the economy going. Please Uncle Sam print money and give it to companies so that it trickles down to us as serve our employers. Bring Zirp back.
One can argue that we're only seeing the beginning of the destruction. The economic policies of this administration could take years to be fully realized. That also means that, unfortunately, it will take years to repair the damage.
Yup. Even if Americans vote out the current administration, there’s no guarantee they won’t vote in another administration like this again. They’ve already done it twice.
We need, at the very least, to revoke "emergency" powers of the presidency, and we need to reinforce that Congressional action overrides executive whim.
The administrative state is a good thing, not a bad thing, and people like Steve Bannon are cancers on American success.
Ideally, we would also ban gerrymandering, revoke unlimited anonymous political spending, and implement ranked choice voting.
I think the contradiction required for this is 1) we need a strong, power concentrated leader to decisively correct the ship and prevent future abuses. 2) we then need the leader to voluntarily limit their powers.
There is nothing unusual about Americans here. Every democracy has the same worry, and always has. Every change in party has brought in instability, going right back to the founding of the country. Sometimes worse than others. Trump isn't that much different from some of the stupid things presidents were doing in the 1800s...
As someone who is just starting their proper adult life, the feeling of seeing the past's most bleak, extreme, "irrational" depression fuel resurface as today's level-headed, sensible predictions for the future is difficult to describe.
Has either the US or the EU ever promised not to retaliate against their enemy states or something? Actually, has any nation or national organization in the world ever promised that? You know, not to engage in war or any retaliation for anything? Just be arbitrarily 'fair'? You're creating standards that simply never existed. When war is on the table, all bets are off, it has always been that way.
Once you do what Russia did, no one should be required to honor anything with you. Countries are bound by laws, especially when you talk about Western countries, but there's always ways to get around to do what's needed if it's important enough - such as in military conflicts. If anything, the legal frameworks that tie their hands often prevented them from going even further, which would've been far better.
It also comes off incredibly disingenuous how lightly you're treating Russia here. You're pretending as if they just had an oopsie, a momentary lapse of judgement, a minor accidental misstep, and the heartless hypocrite West unfairly punished them for it by arbitrarily declaring them 'evil'. Like anyone else is scared because they might just stumble and that'll cause them to get on the West's bad side.
Unless you can think of other countries that are itching to start the new bloodiest, most cruel invasion of a sovereign nation on EU's doorstep, no one's situation mirrors Russia's. If they wanted the EU to sit idle, perhaps they shouldn't have invaded.
Not to mention that most (all?) of those assets haven't been seized. They were frozen (although the interest earned on them was seized by diverting it to Ukraine in some cases).
This downvote isn't a punishment, it's a way to help decrease the visibility of lies and missinformation.
Russia literally launched an aggressive war of conquest. Any response that doesn't involve literal soldiers occupying russian cities is an extremely minor one.
These are numbers from March 2024 to March 2025, right? The current administration was present for 3 of those 12 months. I think the forces that move the whole US and world economy don’t really change between administrations.
About half the population doesn't even understand how marginal income tax rates work. I bet the fraction that doesn't know that "lowering inflation" still means "prices are going up, not down" is quite a bit larger than that.
Snark aside, I really wonder how we as a nation can get to better politics and policy when so many people are so misinformed about the basics. It seems hopeless at times.
Instilling critical thinking skills from a young age. The actual educational content is far less important. "Learning how to learn" should be the primary purpose of K-12.
I think its probably a lot more complicated than that. I think this started decades ago and we are at a point of pivot. I couldn't tell you where we are pivoting to but I'm not really reassured by the obsessive metricization(?) of our economy, from the stock market to inflation numbers to jobs numbers.
There are recurring cycles in the American/Western history, with each cycle lasting +- 20 years.
The cycles are High, Awakening, Unraveling and Crisis.
We're supposedly in the Crisis cycle, where there are major crises like war, depression,revolutions that would help the society to rebuild institutions.
This theory seems completely flawed as it applies itself retroactively, entrenched in confirmation bias, but still entertaining.
Once the gold standard was ended and our fiat currency could be printed and given directly to the ruling class, it was effectively curtains for everyone else.
This is probably the culmination of every administration after Clinton. Unsustainable spending that keeps going until now we are feeling the pressure. This administration is definitely acting in ways I feel are significantly suboptimal but it's unlikely to show the deeper impacts so quickly.
This article is saying the slowdown started as early as a year ago. That of course opens up the discussion of whether this new revision is political cover for the current administration since they just removed the BLS head.
Usually I'd be with you. It's a big ship and even presidents have limited power to steer. But he is really doing all he can to sink it, so while one cannot blame him entirely, one can blame him:
- Firing a lot of federal employees
- Creating an uncertain business environment where no planning is possible via tariffs
That's just what he is breaking short term. There will be no way to reverse the long term damage his policies do.
I'm not arguing about goals, just looking at the execution.
The last one fired the BLS head because he didn't like the jobs report?
Now not only are we seeing major job loss, our statisticians are intimidated and likely are no longer reporting the truth. We now have to rely upon shittier metrics because our core numbers are worthless.
"US job growth during much of the past year was significantly weaker than initially estimated, according to new data released Wednesday.
The Bureau of Labor Statistics’ preliminary annual benchmark review of employment data suggests that there were 818,000 fewer jobs in March of this year than were initially reported."
> Are you reporting on this breaking news scandal that predictions about future events are not always perfectly accurate?
If the predictions are always (or mostly) wrong but always in one direction then wouldn't one begin to suspect that either a) the model is flawed, or b) that there's goal-seeking behind the scenes?
If there's a recent revision of BLS figures showing a correction of PLUS 900k jobs, I'd love to see it.
> If there's a recent revision of BLS figures showing a correction of PLUS 900k jobs, I'd love to see it.
I know right? It's like the new numbers from the BLS are shit or something.
Trump fires the last guy, and then a month later they claim that Joe Biden lost 900,000++ jobs. A correction of this size that has never happened before.
It's like firing the head of statistics ruins your reputation and intimidates the other accountants into making up numbers that favor your politics.
Apologies but this isn't unique, nor has it anything specifically to do with the current POTUS. The US jobs figures has had huge revisions downwards before, for instance last year:
"There's still ongoing chatter about the huge revision to U.S. job growth seen yesterday and what it might signify for the economy and markets. 818,000 jobs were wiped out in the 12 months through March 2024 (or 68,000 per month), resulting in the biggest downward adjustment since the global financial crisis."
Are you ignorant to the large scale firings from DOGE and other intimidation tactics of this administration? Or are you just trolling with bad discussion points?
DOGE firings aren't really going to show up in this data. (The cutoff of March2025 is too new) Intimidation of our statistics teams isn't in the data. You aren't even countering the points I'm bringing up.
Everything in context. The problem now is the obvious and direct intimidation applied to our statisticians. Or do you think that Trump actually gives a care about statistical validity?
Your point is that you didn't trust statistics before. Cool. Well guess what? These actions have made it worse. Now NOBODY should be trusting these stats.
Congrats. You won. You destroyed the trust in our statistical system. That was your goal was it not?
I agree with you. The new crop of statistics is suspect. And all our statistics moving forward will continue to be suspect and I'm not sure how to fix the trust problem.
However, I trusted things before. And this new state of things is uniquely a consequence of recent events. You are ignoring all the crap that happened this year that leads me to distrust the new results over the old results and reporting.
Regardless of which administration is in place, the BLS (USA) does adjust the numbers every month (for two months after the initial release) and annually. This is fairly common with statistics and forecasting in general.
Regardless if the numbers go up or down, regardless of the administration.
So, yes...the last administration did the same thing, and the administration before that, etc.
They intentionally hired incompetent and/or politically-biased bureaucrats to cook the numbers?
Because that's what we're about to see. A players hire B players, B players hire C players, and Trump hires the rest. The next round of economic reports will be much better, I'm sure. Or else.
It is discussion. Continue with agreement or disagreement as desired. I'm not sure if the meta comment attempting to passive aggressively censor the original comment is needed, though.
Well they really fucked up. Biden was visibly senile, almost like trump is now, and they pushed it till last minute when switch to Kamala happened... too little too late.
Who is their counter-weight for future? As an outsider who doesn't watch US news regularly since they use pretty idiotic form most of the time, I know 0 powerful persona types of Clinton or Obama. A lot of blahs and farts in the wind, when you are against an expert populist that's not a winning recipe.
This goes back to 2016, when Dems decided it was better to nominate one of the least popular American politicians in living memory than the alternative candidate who had broad working class appeal. Not to mention they juiced up Trump's campaign because that was the only candidate Mi Abuela was projected to win against. Yeah Trump may be the Antichrist but we wouldn't be here without him being able to run against some of the most comically weak candidates.
Superdelegates hamstrung the process. Kate Brown for instance, the governor of Oregon at the time (who btw was an unelected governer during that term, as her predecessor had stepped down) voted against the will of her constituents for Hilldog -- Oregon had overwhelmingly supported Bernie. Let's not forget some of the caucuses in other states which were outright rigged. An auditorium blew up for Bernie but the presiding party official put it in for Clinton. When shit like that just happens out in the open you have to wonder what's going on behind closed doors.
I believe Republicans actually have a democratic nomination process without superdelegates, which is how they got Trump -- IIRC he had a few early wins and snowballed from there.
There's a number of things going on here, but the short of it is that to become the democratic nominee you need to convince a whole bunch of people, including some super delegates. Hillary Clinton did a better job of this than Bernie Sanders.
How she did it could probably be the subject of an entire book, but no one has ever come up with any particularly scandalous stories about it so far.
Yes, and the superdelegates, whose job was to make sure people didn't pick the wrong candidate (how democratic of them), picked probably the least popular politician in America at the time.
Trump likely would have lost against almost any other candidate, but he had help from the Democratic party, who treated Hil's nom as a coronation.
If you look at it, you'll see that, yes, a million or two million or whatever immigrants arrived during the last year biden was in office.
However, if you're not trying to use statistics to lie, what you'll also find is that millions came every year for the past fifty years, including the years trump was president.
There might be some specific "record number" but only in the sense that the total population of humans increases every year so when the same percentage does the same thing as last year, the absolute number is now larger.
And of course this all ignores the part where immigration is a huge benefit to america.
I think the graph you linked obscures the issue a bit by showing total immigrant population by year, which would change much more slowly than arrivals by year.
It certainly seems to be a big increase under Biden, compared to the last 25 years. Anyway, I personally favor immigration, I just don't want to use statistics to lie to myself either!
I'm not sure what exactly "net immigration" means in specific for these graphs, but according to this chart there were 9.8 million during bush and a predicted 10.4 under biden? This seems... statistically average? The number fluctuates a bit during different decades (and of course it's probably worth remembering that the trump years in this specific graph involved quite a bit of corona virus, whatever that means for these numbers)
My point here is mostly just that america has had lots of immigrants every year for the past 75 or something and there was nothing particularly unique or notable about the recent biden years and the people who claim there is are lying in order to achieve unrelated political goals.
Bush was 8 years while Biden was only 4. Biden was much higher on a per year basis than anyone else since 2000, but obviously people believe what they want to believe.
I'd love to see the evidence for or against this assertion. If BLS is grossly inaccurate, that'd be a good thing to know. If it's accurate, also good to know. Evidence?
He's not the final word on the matter, but Nate Silver writes...
> I've worked a lot with data produced by the Bureau of Labor Statistics and other federal agencies. In fact, an economic index based on a half-dozen of these statistics is part of our presidential election forecast, so we’ve pulled this data all the way back to World War II.3
> And I consider it to be of very high quality. When BLS data is revised as more information becomes available, it’s meticulously documented and explained. For more on how this works, including just how difficult the BLS’s job is and how it’s being made harder by declining survey response rates and cuts to federal agencies that track economic activity, I’d strongly recommend this edition of the Odd Lots podcast with Bill Beach, the former BLS commissioner under Trump 1.0 and Biden. It might not be the most riveting interview, but one thing that comes through is just how much of a straight-shooter he is.
We can start with this reading. Average monthly job growth dropped from 147,000 initially to just over 70,000 a reduction of approximately 52% from their data. This at precisely when the Fed needed to start cuts when the administration has been aggressively hammering them. Hopefully the Fed is not too late this time, and their 6+ month delay cutting won't result in a recession or serious economic impact.
I expect they're correctly hesitant to cut rates at the same time as the president pursues inflationary policies, since that'd be courting stagflation, which was so bad last time it happened that it was one of the main factors that defined our politics for the following three decades.
You model about what the Fed does and how rates affect the economy is just wrong. The fed raising or lowering rates won't change what's happening with jobs. You have to explain why when the fed raised rates, the market shot up and unemployment dropped. But you can't with the model you have.
The fed was cutting rates and on track to continue until Trump threw a tariff grenade into the economy. They, like most businesses, decided they needed to see how the idiotic economic policy played out before doing anything else.
There are the intellectual rationalizers and those that just listen to what Trump does and says.
Trump had no trouble celebrating the numbers when they were in his favor. Snap-firing the chief and installing a MAGA drone when bad numbers come in is a clear political firing with the intent of manipulating the data going forward - not an attempt to reform the agency.
> The BLS needs to be gutted and cleaned out, and Trump (not gonna be popular here) is doing just that.
Literally the only thing they've done so far is fire the political appointee who runs the thing and nominated another one who hasn't been confirmed yet.
These are numbers compiled by this administration about a period immediately before Trump imposed some very very very economically stupid tariffs. It's quite suspicious to have such a big drop timed precisely as if to serve as a handy baseline to minimize the perceived impact of that idiocy; it comes out of an agency (BLS) whose previous head was fired for the sin of a displeasing report and was replaced with a commissar.
Note that survey data about the present is collected and aggregated piecemeal by a sizable bureaucracy and is thus hard for a dedicated ideologue to systematically revise without that leaking. However, when the data about today comes in below estimates the number of people involved in reconciling and dating the discrepancy to ascribe it to the past is much smaller.
Except the BLS numbers have been significantly revised on an ongoing basis for the last five years.
That's been so widely known that I have a really hard time believing that you guys don't know this, which makes me wonder why you're out here propagandizing like this.
You need to understand it's a net loss in persuasion, this gaslighting.
You’re attempting to argue that “revisions exist” is somehow strong evidence for the proposition that “no aspect of particular revision X was politically motivated”.
To be fair I guess, the way the article is titled goes out of its way to mislead.
It would be quite easy to say "Added 911,000 fewer jobs from March 2024 to March 2025" or "the year starting in March 2024", but they are clearly aiming to deflect from the Biden admin by implying last year's revisions are the fault of the administration inaugurated in January 2025.
Judging by the comments here, it worked marvelously.
To be clear, these are this administration's revisions, about what happened in the previous administration.
They also don't have much credibility. One problem with firing the economist running the BLS for reporting numbers the administration didn't like, and replacing her with a political loyalist is that no one will take the numbers the BLS reports seriously anymore.
The revision process is a normal part of reporting employment numbers. Since real-time actual numbers aren't feasible, they use approximate and correlated indicators initially and later revise when more solid data arrives.
I can't tell what your point is though. It almost sounds like you're trying to say the initial BLS numbers have been politically manipulated for years since revisions have been consistently down for a while? Surely not, though, because that doesn't make any sense -- continuously applying an upward boost on initial numbers, only to have them consistently revised downward, for several years, would simply cause the system to adjust to the new norm. The absolute numbers have never been important; it's the relative numbers that count, so a consistently applied manipulation effectively becomes no manipulation over time.
Anyway, there's a lack of proof of manipulation. Well, until recently, when the political manipulation was made publicly.
OTOH, I suppose simple facts and logic aren't important in our post-fact world though.
I am honestly surprised considering everything we have seen regarding the reporting of the jobs report that people are taking this on face value. I think it’s more likely the numbers are being deflated to give the current administration an excuse for the recent downturn in hiring that their policies have caused.
Given that Trump recently fired his head of labor statistics, because he didn't like what was being reported, I'd take this with a grain of salt. Presumably whatever numbers are now being released are whatever "alternate facts" he wants to put out.
There could be various reasons Trump wants to report bad numbers, such as pressuring the Fed to lower rates, or to establish a horrible baseline from which he can then report improvement on by the midterms.
It reminds of the soviet union reporting all sorts of bogus improvement statistics by implicitly using the worst possible baseline they could - from decades earlier.
> Given that Trump recently fired his head of labor statistics, because he didn't like what was being reported, I'd take this with a grain of salt. Presumably whatever numbers are now being released are whatever "alternate facts" he wants to put out.
That may someday be the case, but is is not yet. Trump fired the head, but the analysis and reports are still being produced by the professional career statisticians that have long worked there.
> There could be various reasons Trump wants to report bad numbers, such as pressuring the Fed to lower rates, or to establish a horrible baseline from which he can then report improvement on by the midterms.
Trump doesn’t play 3D chess like this, he just doesn’t. This is just him failing to have the iron grip he wants to have over things. Perhaps he’ll fire more civil servants in response, or he’ll get distracted by something else before he can do so.
First, political commentary should be regulated, especially from these moron podcasters! What the hell do they know? They are angry and out with an agenda!! Just to make their living from barking instead of doing a meaningful/real job.
Also, I'm not sure why it's allowed to have someone come from SA/Zimbabwe and comment on posts of US political candidates.
Now coming to the Right! I believe they are the single biggest reason behind America's current rot. Which problem are they trying to solve? They always contradict themselves.
It should be compulsory for voters to vote and have them go through training to make them understand how the economy, the Fed, world trade, US intelligence, foreign policy, interest rates, and bonds work. One might argue that it should be done in the schools. Sure! But then why are we here? Of course, Right would scream as usual No, my choice. No son! Enough with your damn choices. Not voting should invite severe legal, financial, and civil penalties. That's how we are going to fix this mess!
Who does the regulating? The current Trump regime? Huge first amendment violation
> come from SA/Zimbabwe and comment on posts of US political candidates.
Because those posts are being made on a private platform. Are you sure you want something worse than UK's Ofcom proving your American identity just to speak?
> It should be compulsory for voters to vote
Maybe, but definitely not in a 2 party system.
> make them understand how the economy, the Fed, world trade, US intelligence, foreign policy, interest rates, and bonds work
Not specifically those. Please just have universal free education. There's no need to specifically teach kids how to think politically. That's definitely going to get abused for propaganda
> Who does the regulating? The current Trump regime? Huge First Amendment violation
When you are running a YouTube channel or anything similar with millions of subscribers or even a few thousand, you are no longer an individual; in fact, you become just a news channel at that point. FCC has rules [0] for news channels, and those rules should apply to these unhinged political podcasters as well.
License Revocation: In extreme cases, the FCC has the power to revoke the station's broadcast license.
In other words, work with the firm (Meta\Google) to get that channel suspended.
Alternatively, let people add facts. I don't think YouTube does that currently.
> Are you sure you want something worse than UK's Ofcom proving your American identity just to speak?
What's wrong with only allowing citizens and residents to comment on their country's political matters?
What I really fail to understand - how can departments like BLS screw up to this extent. Either they are grossly incompetent or they are intentionally corrupt.
The data covers the period from March 2024 to March 2025 and trims the average monthly jobs gains seen during this period (roughly the last 10 months of Joe Biden's presidency and the first two months of Trump's) from a monthly average of 147,000 to about 71,000.
50% error. This is more or less consistent. How can a department have this error % and still have their job. I understand the data collection mechanism is not the most sophisticated, but even accounting for that, this consistent error % is not to be overlooked.
I wonder why there is such lack of accountability from firms whose data pretty much feeds the world's economy.
There's a little bit of a philosophical thing here -- do you adjust the earlier measurement by some function because it's usually been high and revised downwards? If you do, you need to let every user know that you're doing something different, etc.
The worst case is that both the statistics orgs and the users are adjusting the numbers for a bias and overshooting.
This means there's a certain inertia: it can be better to handle the interim reports the same, even if they've been biased one way for several years, than to introduce a change that makes the numbers not comparable to history.
> 50% error.
It's not a 50% error; it's a 50% error in the magnitude of the change.
That's like saying that my room increased from 71.4 to 71.6 degrees, but my thermometer only saw an increase from 71.4 to 71.5; therefore, my thermostat has a 50% error.
This means there's a certain inertia: it can be better to handle the interim reports the same, even if they've been biased one way for several years, than to introduce a change that makes the numbers not comparable to history.
This is a very interesting point. So if BLS suddenly became more accurate, all the agencies have to re-tune their own biases and corrections => Could lead to short term discrepancies.
What one sees as inefficiency is actually efficient from a totally different lens.
Yup. Obviously you want to fix the bias in the early version of the numbers eventually.
But you don't want to change what you're doing all the time, so you stay an easy product for everyone else to use.
(Interesting that this "overreport jobs in the preliminary numbers" bias has showed up; in older data using similar methodology it didn't exist, but now it seems to...)
It’s a survey, there are a lot of non-responses (getting worse) and late responses. They try to correct for this, and that normally works, but when “weird” things are going on the corrections can be pretty wrong. The people who use these numbers understand all of this and it’s fine. It’s just the popular media that freaks out.
The quarterly numbers come from better data sources (tax withholding, unemployment insurance payments, etc)
For example, if a small business goes out of business and fires everyone, they probably won’t respond to the survey. If the rate of small business failures is not what we normally see (more of less is absolute of relative numbers) it can create a bias that throws the models off.
You might want to read up on the process a little more before forming such strong opinions. The BLS is extremely transparent, at least for now. The earlier reports are intentionally more noisy because there is value is being fast and then revising later, and everyone who uses this data is aware of that.
Calling this a 50% error rate is simply wrong. If an earlier report said a single job had been created and that was later revised to two jobs, that would be super humanly accurate and yet you would be calling for everyone to be fired over the 100% error rate.
The earlier reports are intentionally more noisy because there is value is being fast and then revising later, and everyone who uses this data is aware of that.
I get it and yeah my tone is very exaggerated. I don't think anyone in BLS should be fired and whoever is suggesting that does not understand how public institutions work.
I am just curious why there is so much of a discrepancy. This has been pretty much the status quo in BLS for a long time. They issue numbers and then they revise them later. However, you'd expect the revision to be moderately within an error %age.
Also how will this retroactive change help everyone involved. Ok, the new job numbers reflect a gloomier past (or a more vibrant past) how is that even helping everyone who is so focused on 'what's going to happen tomorrow'.
I retract my stance about BLS being intentionally corrupt - that's uncalled for.
I disagree. The BLS head was either incompetent or corrupt. The two are not mutually exclusive so they easily could have been both. Firing the BLS head was the obvious choice and it sends the right message to all involved that we will not accept this margin of inaccuracy when it impacts our economy. We need a BLS head with the balls to raise hell when the numbers are not reflecting reality.
Revisions and surprises are routine. Data comes in gradually, but estimates are useful even before all data has arrived.
Early data is based on business reporting and businesses that report on-time aren't necessarily representative of all businesses. Those people who use this data know this, and prepare for revisions.
I hope this helps and you understand better. Anyone here who still thinks this is still incompetence or corruption because surveys come late?
>I wonder why there is such lack of accountability from firms whose data pretty much feeds the world's economy.
Create punishment system? Unless compaies report data back to BLS very fast, they pay big fee or are taxed higher. Small shops would hate it.
Create punishment system? Unless compaies report data back to BLS very fast, they pay big fee or are taxed higher. Small shops would hate it.
Or incentivize companies to report accurate data pretty fast. Payroll management systems can be plugged in real time, but that costs money and yeah small businesses are not going to be happy. So incentivization works better than punishment I think.
People who don't do statistics and don't understand how the BLS gets their data think there must be corruption when they correct previous reports. Think of it this way, if they correct their previous estimates with new data, isn't that a sign they are NOT corrupt? Why would a corrupt organization correct their previous reports?
I advise you to do a little reading on how these reports are corrected. People relying on them understand how they work. People freaking out about them don't.
One factor is that a part of their measurement is tracking how many new companies are founded and estimating how many employees a new company is likely to have. These numbers have been trending down and rapidly fell due to a lot of new companies being one person LLCs for gig economy work. It appears they haven't kept up with this trend so they overestimate how many jobs these companies will have.
Maybe you don’t understand the role of the BLS or what it does. Maybe you’ve been sold a bill of goods that it is supposed to be an infallible oracle, when it is, in fact, a useful measurement device with limitations that have been well known for decades.
And it is telling that a certain flavor of partisan is finds it novel.
"No Matter Who Is President, Don’t Trust Government Data"
>There isn’t clear, undeniable evidence that officials at the BLS are editing or making up the jobs numbers that go out to the public. But it’s easy to see why people think that they are when you look back at the series of dramatic downward revisions the Bureau has made in recent years—especially during Biden’s presidency.
>The monthly jobs report is a recurring, previously scheduled drop that all major media outlets publish immediately. And whenever the headline number is dramatically large or at all higher than expectations, White House officials are quick to seize on the news to frame it as a consequence of their brilliant economic agenda. However, when these jobs figures consistently get revised at a later date—ostensibly due to new information—the revisions are rarely given the same level of attention by the media and are therefore only really noticed by the small subset of the population that is closely monitoring economic data.
>So, as an example, the Biden administration was able to loudly celebrate BLS reports showing dramatic job growth month after month. And when almost all of that growth was revised away in future reports, very few people noticed. The consistently inaccurate jobs reports gave the public the false impression that the economy was booming. The fact that this was due to the same kind of mistake apparently being made over and over again struck many as suspicious. And rightfully so.
>It is important to note, however, that this has continued after Biden left office. So if the BLS really was propping up initial jobs reports to make the economy look stronger under Biden, then by every meaningful indication, they have done the same thing under Trump—at least so far.
https://en.wikipedia.org/wiki/Stagflation
I sure hope not, because stagflation would be extremely unpleasant for everyone. Central banks like the Federal Reserve would be forced to raise interest rates, to put stress on businesses and consumers, so businesses find themselves unable to raise prices further and consumers find themselves unable to demand greater pay at work.
Raising rates to put stress on businesses and consumers is the only method known to work for ending self-reinforcing high inflation. It's what Paul Volcker did at the Federal Reserve in response to the stagflation that started in the early 1970's in the US and other countries, after OPEC raised oil prices. Volcker raised the federal funds rate in fits and starts to a high of 20% in 1981:
https://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_F...
It worked. Volcker's actions are widely credited with ending self-reinforcing high inflation. His actions also triggered a recession.
Stagflation itself triggered a stock market crash in 1973-1974. It took over 20 years, until 1993, for the US stock market to recover:
https://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market...
Like I said, it would be extremely unpleasant, for everyone. I hope we don't end up with stagflation.