Marina Lyubimova
⬤ Federal Reserve Chair Jerome Powell just dropped a bombshell about US employment numbers. He's saying the official job creation data might be overstated by around 60,000 positions every month. Here's what that means: the reported average of 40,000 new jobs since April could actually be a loss of nearly 20,000 jobs once the numbers get corrected. That's a massive swing that completely changes how we should view the labor market right now.
⬤ The problem comes from how the Labor Department tracks new businesses opening and old ones closing. Their model has been adding hundreds of thousands of phantom jobs to the count each year. Meanwhile, the real picture looks pretty rough—small businesses cut 120,000 jobs in November alone, October layoffs hit 153,074 (the worst October in 22 years), and holiday retail hiring dropped to its lowest level since 2008. Powell noted that "the labor market is under pressure" and suggested job creation may have already turned negative, which explains why the Fed keeps cutting rates even though inflation's still too high.
⬤ Looking at the data with this 60,000-job adjustment changes everything. Months like May, June, and August would flip from slight gains to actual job losses. Even the stronger months like July and September would look way weaker than reported. If the upcoming revisions confirm what Powell's worried about, we're looking at a very different economic situation than most people think—one where employment might already be shrinking and the soft-landing story needs a serious rewrite.
Marina Lyubimova
