The April jobs report has shocked Wall Street, showing job growth of 253,000, which is higher than the estimated 180,000.
Unemployment has gone down to 3.4%, the lowest it has been since 1969. The average hourly earnings have also increased by 0.5% for the month, which is a 4.4% increase from last year.
Despite these figures, looking beyond the headline numbers and understanding the bigger picture is essential. By scratching beneath the surface, we can find the whole truth of the matter.
Why Do Headline Jobs Numbers Always Beat Expectations, While The Revision Always Misses?
One of the most important factors to consider when looking at the jobs report is how the figures have been revised in the past few months. The March count was slashed to 165,000, down by 71,000 jobs, and February fell to 248,000, a reduction of 78,000.
Therefore, Wall Street is provided a blowout number every month, but it's important to note that the headline number beats every month, and the revised number always misses.
The Bureau of Labor Statistics (BLS) has consistently released these impressive figures, but it seems suspicious that the numbers are always revised downwards. This trend has been going on for 13 months in a row.
[ctt template=”3″ link=”9idJF” via=”no” ]The Bureau of Labor Statistics (BLS) has consistently released impressive job figures, but it seems suspicious that the numbers are always revised downwards. This trend has been going on for 13 months in a row.[/ctt]
The BLS is a part of the government, so it is essential to question whether or not these numbers are overstated or if the government is flat-out lying.
The majority of job growth is from businesses with 20 employees to 249 employees, which includes bars, restaurants, hotels, movie theaters, cafes, etc. The majority of growth comes from the leisure and hospitality sectors, which is not surprising.
However, this could change in the coming months, as federal student loan payments could restart as early as May, which could mean that people will have to divert their money to loan payments instead of leisure activities.
The average student loan payment is around $400, and the majority of young people have seen their wages skyrocket, with the younger demographic seeing wages increase by almost 12% as of March 2023.
It is important to note that the wages of young people have vastly exceeded their increase in expenses, and they most likely don't feel the impact of shelter costs going up, energy costs, or food costs as they are living at home.
Most people's purchasing power is much less than it was in 2019, as their wages have only gone up by 4-5% per year, which has been below the inflation rate.
This is not true for the younger demographic, as their expenses have gone down dramatically, as they don't have to worry about paying student loan debts.
Although the jobs report seems impressive, it is important to understand the whole picture.
It is essential to consider that the job numbers are always revised downwards, and the majority of job growth comes from the leisure and hospitality sectors.
Federal student loan payments could resume as early as May, which could change the dynamics of the economy.