Vice President Kamala Harris crowed when the federal government released its monthly jobs numbers for June. “The latest jobs report shows America’s economy added 206,000 jobs in June, continuing record job growth,” Harris said on Facebook on July 5 in celebration of that month’s Bureau of Labor Statistics release. “That’s more jobs created in June than Donald Trump created during his entire presidency.”
A month later, Harris, now her party’s standard-bearer after President Joe Biden unexpectedly dropped out of the running, faced GOP calls that she eat some crow. Those charges had to do with a massive correction by the BLS of the employment numbers that ran from March of last year to this March. The monthly estimates had been off by over 818,000 jobs all told, BLS found. June’s employment numbers that Harris boosted will likely face a downward revision as well.
“The Harris-Biden administration has been caught fraudulently manipulating job statistics to hide the true extent of the economic ruin that they’ve inflicted on America,” Trump charged at a North Carolina rally on Aug. 21. “The new data from the Bureau of Labor Statistics shows that the administration padded the numbers with an extra — listen to this one — 818,000 jobs that don’t exist.”
Fact-checkers were quick to pounce on the former and perhaps future president’s remarks. “There’s no evidence for such claims, and the Trump campaign hasn’t provided any,” wrote Lori Robertson for FactCheck.org.
Trump was not wrong, however, that the BLS correction was large and possibly ruinous. It was so large that Federal Reserve Chairman Jerome Powell almost immediately announced an interest rate cut was coming in September. Powell did this to calm markets and to satisfy the Fed’s “dual mandate” of taming inflation and boosting employment.
Several Republican senators had questions about the BLS’s data problem. One paragraph in a letter to acting Labor Secretary Julie Su seeking “information regarding the BLS’s methodology in estimating job numbers [and] why the BLS has failed to accurately assess changes in labor participation” gets at the nettle of the political issue.
“These discrepancies, representing jobs that the Biden-Harris Administration claimed to have created, which simply do not exist, were reported as signs of economic dynamism and positive job creation,” Sens. Roger Marshall (R-KS), Ted Budd (R-NC), Rick Scott (R-FL), Marsha Blackburn (R-TN), and Markwayne Mullin (R-OK) complained.
“There were multiple instances over the last year in which news outlets reported that the job market was ‘strong,’ ‘red-hot,’ or ‘sizzling,’ to name a few,” the senators added. “News outlets took initial BLS data at face value, concluding that the job market was strong.”
There was likely some referee-working in that complaint, but sometimes the players have a point. Evidence suggests the job market is simply not in great shape, and the federal government and financial institutions are catching up.
“The July jobs report was considerably weaker than expected,” financial services firm Comerica wrote in its assessment. “Employers added just 114,000 nonfarm payroll jobs, the unemployment rate rose to 4.3%, and average hourly earnings growth slowed to 3.6%. That gave July the highest unemployment rate and slowest wage growth since 2021.”
It gets worse. Other BLS data “emphasize how the job market is softening,” Comerica reported, and this softness is not isolated. To wit: “July’s weakness wasn’t just in Texas, where Hurricane Beryl was a huge disruption, but spread across a number of states on the East Coast, Midwest, and High Plains.”
Tight job market no more
One thing that workers had going for them for the past few years was a tight job market, or at least the appearance of one. It enabled them to negotiate significant raises and other concessions, including more work-from-home arrangements long after COVID-19 had shifted down from a pandemic to an endemic irritant.
Where does the latest BLS report leave workers as they size up their finances and weigh their electoral options? Suppose the September or October jobs reports paint a slightly rosier picture, as is possible. At this point, how many people will take those numbers at face value? And how did the BLS miss by over 800,000 jobs in its monthly survey?
BLS Commissioner Erika McEntarfer did not reply to a Washington Examiner request to shed light on what went wrong. Fortunately, University of Central Arkansas economist Jeremy Horpedahl pointed the Washington Examiner to relevant writing on his blog Economist Writing Every Day.
“I think a big challenge post-2020 is that some of the BLS models just aren’t working as well as they used to,” Horpedahl told the Washington Examiner. “This is understandable, and they are always updating the models, but the structure of the labor market might just be fundamentally different now.”
Horpedahl pointed out that BLS has had to make significant annual revisions before. One earlier large revision showed the department had undercounted job growth during the early Biden administration. That fact would seem to undercut charges of blatant manipulation, he suggested.
He also insisted that the job market still made some gains, even with the downward revisions. There’s a lot of churn in the American economy, with businesses closing or downsizing in response to market demands. Economists tend to reckon that 100,000 new jobs in a month is about what it takes to tread water. Anything below that is a red zone, and anything above that is good news for workers.
“If we spread the 818,000 jobs revision over 12 months, which is, more [or] less, what BLS will eventually do once they have the final numbers, this amounts to 68,000 fewer jobs per month on average,” Horpedahl explained.
He added, “Over that time frame [March 2023 to March 2024], the average monthly job growth was 242,000 jobs. Crucially, the lowest monthly job growth during that period was 165,000 jobs, in October 2023. Cutting 68,000 from that month would indeed be large, but every single month in the revision period would still be positive.”
Still, this was a big miss, Horpedahl admitted, with job growth “overstated by perhaps 40%.” He suggested it should lead to a reassessment of how much stock people put into the monthly reports, as opposed to the quarterly and yearly ones, which do a better job of capturing the whole labor force. However, he insisted that the monthly reports still “probably get the direction of job growth correct.”
Debating the economy
Harris is running as the anointed vice president. Sometimes that works out. Ronald Reagan’s vice president, George H.W. Bush, managed to win 40 states and 426 electoral votes in 1988. And sometimes it isn’t nearly enough. Lyndon Johnson’s vice president, Hubert Humphrey, won only 13 states and 191 electoral votes in 1968.
What that means in practice is that the Biden administration’s strengths are her strengths and its weaknesses are her weaknesses. The Biden White House and the Democratic congressional majority of the former 117th Congress spent a great deal of money on progressive priorities. The Fed’s moves to help finance this binge, coming soon after the disruptions and bailouts related to COVID-19, caused significant inflation.
Because of spiraling prices, polls fairly consistently gave Trump the edge on economic issues over Biden, which the president groused about. It may have simply been a honeymoon effect, but polling has given Harris more of a fighting chance. The revised job numbers threaten to end that honeymoon on a disastrous note.
At an Aug. 27 rally in Grand Rapids, Michigan, Sen. J.D. Vance (R-OH), the Republican vice presidential candidate, previewed what promises to be contentious presidential and vice presidential debates. Vanishing jobs were featured in his case for voters to “tell Kamala Harris ‘you are fired.’”
“Now, last week, the biggest heist in American history happened right under Kamala Harris’s nose,” Vance said. “Somebody stole 818,000 jobs that she and Tim Walz have been bragging about. Did you see that? Where’d they go?”
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The vice presidential hopeful worked the Republican crowd. “Now, you may not have heard this because our friends in the back, the media, doesn’t like to talk about it,” he said. “But what really happened is this: The Harris administration had to admit that more than a quarter of all the jobs that had supposedly been created last year were actually fake. They never existed.”
Vance twisted the knife for good measure, calling it “the biggest revision to the job numbers since the financial crisis.”
Jeremy Lott is the author of The Warm Bucket Brigade: The Story of the American Vice Presidency.