Despite Turmoil, America’s Most Reliable Job Count Still Comes From the BLS

If you want to know how the U.S. job market is faring, economists still trust the “gold standard” Bureau of Labor Statistics more than alternative sources of information, despite recent turmoil at the agency.

All eyes in financial markets will be on the BLS’s official jobs report set to be published Friday. This will be the agency’s first jobs report since President Donald Trump fired its director in August after accusing her of rigging the data. Economists expect this month’s report to show U.S. employers added a lackluster 75,000 jobs in August, up from 73,000 in July.

On Thursday, at least three alternative measures of the labor market published by private companies showed hiring was slowing down. However, they did little to move financial markets, which are still focused on the government’s jobs figures.

Private employers added 54,000 jobs in August, according to payroll provider ADP, which publishes its own monthly report. That was down from 106,000 in July, and fewer than the 75,000 jobs forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

A separate report from consulting firm Challenger, Gray, & Christmas showed employers announced 85,979 job cuts in August, up 39% from July and up 13% from the same month a year ago. It was the highest number of job cut announcements since 2008, setting aside 2020 when the pandemic hit, the company said.

Revelio Labs, a data analytics company, released a brand new measure of the job market showing U.S. employers added 50,000 jobs in August, down from 117,000 in July, and the fewest since May.

Private vs. Government Data

To be sure, economists and officials haven’t been ignoring data from private providers. Policymakers at the Federal Reserve have said they monitor data from ADP and other providers alongside the government’s reports on inflation, employment, and other key measures of the economy’s health.

However, the BLS surveys have several advantages that make it the undisputed king of data, at least for now. For one thing, no other survey matches its sheer size: the agency surveys 121,000 government agencies and businesses each month and 60,000 households. On top of that, its quarterly survey covers more than 95% of the country’s non-farm workforce.

It’s also highly transparent: the bureau publishes its detailed methodology and raw data, meaning if any of its numbers didn’t add up, outside experts would quickly detect the problem.

By comparison, ADP covers a massive 22 million workers monthly but does not include data on government agencies that are major employers, such as public schools.

However, that doesn’t mean the private reports don’t have value, experts said. They can often be used to identify patterns in the labor market and sometimes in a more timely manner.

“They’re a wonderful compliment to the official statistics, but they are not independent of the official statistics,” Erica Groshen, former director of the BLS, said in March on the EconoFact podcast. “They rely on official statistics for validation for their weighting because they’re never representative samples.”

“The companies that do this don’t have the incentive…[or] the resources to provide historical series of comparable data,” she said. “And they’re not as transparent, and they may stop producing this on a dime if their goals change. So they’re a very useful complement, but not a substitute.”