Q3 2024 QCEW suggests employment was significantly weaker than we thought final yr
– by New Deal democrat
This can be revenue, spending, and housing week, however that received’t begin till tomorrow. Whereas there’s no information at this time, there was an essential replace to employment knowledge final week; specifically, the QCEW for Q3 of final yr.
As a refresher, the Quarterly Census of Employment and Wages is simply that, a *census* quite than a survey. It consists of one thing like 95% of all companies, and is taken from their tax reporting. This implies it isn’t an estimate or guess, however very near a full itemized rely. The downside being, after all, that it doesn’t get reported till virtually 6 months later.
Since no less than June of 2023, the QCEW has been telling us that the month-to-month jobs report has been over counting employment. The current benchmark revisions downwardly revised 2023 and 2024 employment by about -600,000.
And the Q3 2024 QCEW tells us it can most likely must be revised down additional.
Because the QCEW shouldn’t be seasonally adjusted, the one approach to measure is YoY. Additionally, sadly FRED doesn’t decide up the info for simple placing in graphic type. However right here is the essential chart:
To chop to the chase, within the first 5 months of final yr, employment grew both 1.3% or 1.4% YoY. That abruptly downshifted in June, and remained anemic by means of September, with YoY development of 0.8% to 1.0%.
Now leet’s evaluate that with a graph of the YoY% development in nonfarm payrolls:
With the current benchmark revisions, the YoY development price in jobs for the primary 5 months of final yr is now estimated at 1.4%-1.6%, solely barely greater than the QCEW. However within the JUne by means of September interval, it’s 1.2% or 1.3%, considerably greater than the QCEW.
In keeping with the crrrent nonfarm payrolls numbers, the economic system added virtually 2 million jobs in the course of the 12 months from September 2023 by means of September 2024. If we deliver that right down to a 0.9% acquire (the typical of the June by means of September YoY positive factors as measured by the QCEW, that brings us right down to a 1.4 million job acquire, a distinction of -600,000, primarily centered on the final 4 months of that interval.
Now here’s a graph of the month-to-month positive factors in jobs throughout that very same 12 month interval:
The present estimate of job positive factors within the June by means of September 2024 interval is 486,000, together with three very anemic months. If we apply the YoY downshifting of the QCEW throughout these months, all of these positive factors disappear.
On the identical time, it’s essential to notice that the entire QCEW numbers for 2024 are preliminary at this level. In 2023 there was an analogous cratering of the QCEW, strongly suggesting precise job losses – that subsequently disappeared when the QCEW for that yr was finalized.
Lastly, let me emphasize that the above doesn’t imply there was a recession final yr. Nearly the entire different essential indicators confirmed continued development by means of the interval. And the QCEW additionally stories wage development, and there it confirmed continued combination wage development of 4.4% and 4.5% in Q2 and Q3 of final yr, very a lot in keeping with combination nonsupervisory payrolls from the month-to-month stories:
Nonetheless, it’s one other cautionary sign that the economic system final yr (which additionally means the economic system going into the November elections) most likely was not as robust as was thought on the time.
The “gold standard” of employment stories means that final summer season’s job development was even weaker than we thought, Indignant Bear by New Deal democrat
