Revision of jobs reports by the Labor Department: Insights into the main factors
The Bureau of Labor Statistics (BLS) revises its monthly jobs report data to improve accuracy as more complete information becomes available. The initial monthly employment estimates are based on partial survey responses collected within a limited timeframe, often resulting in some businesses not yet reporting their data at the time of the first release.
The BLS issues two subsequent monthly revisions to update prior months' figures. Key factors contributing to these revisions include incomplete initial data, rising response rates, seasonal adjustment recalculations, annual benchmark revisions, and methodological distinctions.
Incomplete initial data arises due to late responses, particularly from employers with monthly payroll schedules. The average data collection coverage increases with each revision cycle, rising from about 68.3% in the initial release to nearly 93% by the second revision, allowing for more comprehensive employment counts.
Seasonal adjustment recalculations occur as more data become available, refining the estimates of underlying employment trends beyond normal seasonal patterns. The BLS performs an annual benchmark revision that re-anchors its estimates based on nearly complete employment counts from state unemployment insurance tax records, helping to correct for sampling and modeling limitations in monthly survey data.
The monthly jobs report is primarily based on the establishment survey of businesses, which counts jobs at each payroll, making it subject to sampling and reporting variances. The household survey complements this data but has different coverage and limitations.
In July 2024, the U.S. economy added 73,000 jobs, below the estimated gain of 110,000 jobs by LSEG economists. The BLS contacts approximately 121,000 businesses and government agencies on a voluntary basis each month, representing 631,000 individual worksites.
Notably, the BLS made downward revisions that reduced employment in May and June by 258,000. The collection rate for the first publication (initial release) was 68.3%, while the collection rate for the second and third publications (first and second monthly revisions) was 89% and 92.8%, respectively.
In 2023, President Donald Trump fired the commissioner of the BLS, Erika McEntarfer, amidst claims without evidence that the jobs report was manipulated. The BLS goes through an annual benchmarking process to re-anchor its sample to more current population data to prevent data from drifting further away.
The BLS's Current Employment Statistics survey is one of, if not the largest monthly surveys in the world, with over 12.2 million business establishments and 155.7 million employees as of June 2024. The BLS allows time for businesses and agencies that didn't report in time for the first or second published estimates to respond to the survey.
In summary, revisions are a normal and expected aspect of the BLS reporting process, allowing the agency to balance timely release of employment data with improving accuracy over subsequent months. Larger and more notable revisions sometimes occur during economic downturns or as a result of the annual benchmarking process aligned with more comprehensive state records.
- The BLS's revisions to the monthly jobs report data in subsequent months are influenced by factors such as incomplete initial data, rising response rates, seasonal adjustment recalculations, annual benchmark revisions, and methodological distinctions, which are all related to the interplay between business, finance, and politics.
- The BLS's monthly employment estimates are based on the establishment survey of businesses, making it subject to sampling and reporting variances, and this data is closely followed in general-news, economics, and business sectors, highlighting its significance for understanding the nation's employment trends.
