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The economy is a mixed bag right now. The stock market is still at record levels. Corporate profits are strong. Inflation is still an issue, due partly to the Trump administration’s tariffs. And this week, the Bureau of Labor Statistics (BLS) revised its jobs numbers downward — about 900,000 fewer jobs than previously reported for the year ending in March.
Elise Gould, senior economist at the Economic Policy Institute, explains that the BLS asks employers how many people are on their payroll, then estimates what that means for job growth/losses in that month. Each year, the BLS benchmarks those payroll numbers against the “universe” of unemployment insurance tax records. This week, they released their preliminary estimate, and in February, they’ll come out with their final benchmark estimate.
The revision suggests that the economy at the end of President Biden’s term was not as rosy as initially thought. “Growth was about half as fast as when initially reported, and yes, most of the data covers 2024,” Gould says.
Before this revision, President Trump was criticising the BLS and fired its chief. Gould says attacking the BLS’ process is a mistake. “It is going to cause a loss of the data integrity that we rely on so much. … Employers … businesses, Wall Street, individuals rely on that important information to be able to make better policy and to make better decisions, and compromising that will come at a cost.”
As for the job market, it’s showing weaker growth, Gould says. She points out that people were hiring at faster rates when the U.S. came out of the COVID pandemic recession. But right now, the rate is lower. Gould says that means people are staying put in their jobs, especially given the economic uncertainty they’re feeling. And so, it’ll be tougher for would-be entrants to get a new job.
With holiday shopping a few months away, people haven’t seen the full impact of tariffs on the cost of goods, she says, but down the line, “there could be large implications.”
Gould points out that when people think about the overall economy, the focus is on averages, but some populations are getting harder hit than others, such as Black people and young people, who’ve experienced higher unemployment. Those groups will see a recession first if it happens, she says.
Policies around mass deportations are also a big drag on the economy, Gould says. “Having people being forced out, not being able to go to work, that has an impact on the overall economy and on the labor market growth for U.S.-born workers.”
She adds, “If you have a slowdown in immigration, that's going to be a drag on labor force participation. And you don't have people to produce the goods or provide the services that are demanded. And you could have a slowdown in growth because of that, and that's going to affect foreign-born workers and U.S.-born workers alike.” |
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