The Indicator from Planet Money

Episode•August 6, 2025•9 min

What you need to know about the jobs report revisions

Why do revisions to the jobs report happen? Today on the show, we speak with a former Commissioner of the Bureau of Labor Statistics about why revisions occur and how we should interpret the monthly report's actual message. Related episodes: Can we still trust the monthly jobs report? (Update) (https://www.npr.org/2025/08/05/1256758542/bls-firing-economic-data-integrity-update) What really goes on at the Bureau of Labor Statistics (Update) (https://www.npr.org/2025/08/04/1256727558/trump-fires-bls-director-jobs-report) How you're using AI at work (https://www.npr.org/2025/08/01/1256575152/july-jobs-report-ai-in-the-workplace) For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org (http://plus.npr.org/). Fact-checking by Sierra Juarez (https://www.npr.org/people/g-s1-26724/sierra-juarez). Music by Drop Electric (https://dropelectric.bandcamp.com/). Find us: TikTok (https://www.tiktok.com/@planetmoney), Instagram (https://www.instagram.com/planetmoney/), Facebook (https://www.facebook.com/planetmoney), Newsletter (https://www.npr.org/newsletter/money). To manage podcast ad preferences, review the links below: See pcm.adswizz.com (https://pcm.adswizz.com) for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences. Learn more about sponsor message choices: podcastchoices.com/adchoices (https://podcastchoices.com/adchoices) NPR Privacy Policy (https://www.npr.org/about-npr/179878450/privacy-policy)

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Transcript

0:01

Npr.

0:11

This is the indicator from Planet Money. I'm Jerryne Woods.

0:14

And I'm Waylon Wong. We are still processing the shockwave of President Trump firing the Commissioner of Labor Statistics, Erica McIntarfer, last week. The jobs report that her agency puts out is packed with some of our favorite indicators.

0:29

It's the only report we have an air horn for.

0:34

It's true. And Trump claimed, without evidence, that downward revisions showing jobs numbers were lower than initially reported means the numbers are rigged, as we showed yesterday. That's not true. There are too many layers of civil servants involved for rigging to take place without that becoming public knowledge.

0:52

But it is true that the downward revisions were large. So today on the show, how revisions to the jobs numbers happen, what the process is, and what law. What did last week's revisions say about the economy? Here on the indicator, we have announced the jobs numbers right from the show's beginning. We knew it had to be

1:22

jobs. That's right. Once a month, we put aside the stock market. Who cares?

1:27

254,000 jobs were added, 187,000.

1:32

Man, we love a jobs number around here. And whether you're a cleaner or a carpenter or even if you're looking for work, the jobs report is like a mirror up for most people's personal finances.

1:44

We do need to caution, though, the jobs report is just the first pass. The numbers can change a lot. Like we saw on Friday is that the BLS made a big downward revision to its previously reported job numbers.

1:58

The air horn turned into a sad trombone.

2:00

Yeah. And you know, revisions are a big part of the jobs report. They happen all the time. Yes, it was larger than normal, but every single month, the previous couple of months gets revised. And then there's a big adjustment annually, too.

2:14

That got us asking, why exactly do revisions happen? Bill beach was the Commissioner of Labor Statistics right before Erica McIntarfer. He served under both the first Trump administration and the Biden administration.

2:26

The basic reason is that we get additional information. So where does that information come from? Well, the jobs numbers are derived from a survey. So there's like, I don't know, 12 million firms in the United States, and we are doing a survey of about 600,000 at most. And about 68% turn their surveys in the first month. It's not a bad response rate, but you want more than that.

2:53

So this kerfuffle basically started from business owners and HR managers handing in their homework.

2:59

Lately, when late homework meets a conspiratorially minded president, heads will roll.

3:04

Stepping back, you know Part of the whole magic of statistics is that you can approximate based on just a small sample. You can extrapolate. So I'm curious about why the latecomers might change the numbers in one direction. Like, shouldn't the overestimates be canceled out by the underestimates?

3:21

Yeah. Bill says there might be underlying issues that particularly affect the stragglers, the companies that don't respond to the survey in the first month.

3:29

A lot of times the smaller businesses are the late returns. And if you have a thing affecting small businesses rather than large businesses, for example, the tariffs might be affecting small businesses, or bad weather might be affecting small businesses. Who knows? I mean, there are many factors then that additional information is important to include because small businesses really do employ a lot of people.

3:54

And about why this specific month's revisions were so high, Bill says it's the kind of thing that is a little

4:00

foggy in the moment now, honestly, most revisions are not this big, but these are not unprecedentedly large revisions. When I was commissioner, we had much larger revisions, and it was because we were coming into or going out of COVID Okay, that's a pretty good obvious reason why you would have revisions. And people didn't complain about the size of the revisions. It was obvious what's lacking here is the reason. And once the reason becomes apparent, I think people will begin to say, oh, yeah, that makes sense.

4:28

As Bill said, a possible reason for the big revisions could be that tariffs are affecting smaller businesses more than larger businesses.

4:35

You also have the immigration crackdown.

4:37

Yeah. It could mean those smaller companies aren't hiring as much. It could also be that the companies that aren't responding are actually going out of business.

4:46

Bill also points to state and local government.

4:49

State and local government reported late, and that caused a big change. I think the biggest reason is they were all running out of COVID era money. Strange that money would still be around. And they had used that for hiring purposes for years and years and years, and now it wasn't there, and so they weren't hiring as much.

5:07

So there are plenty of reasons why the revisions might have happened.

5:11

A lot of reasons. But aren't there always reasons why this time is different? Like there's always something going on, maybe a hurricane or new tax cuts. If you look at the technical notes that the Bureau of Labor Statistics, the bls, puts out, the first round of jobs Numbers has a 90% confidence interval.

5:30

That means you can be 90% confident that the actual number is within a certain ballpark.

5:35

And for the first release, when it Comes to the jobs report, that ballpark is roughly plus or minus 136,000 jobs. Anything less than that number means you can't even be sure any jobs are added.

5:48

Okay, that's really big. That's a big number.

5:51

True. That said, by the. The third month, when you get those revisions in, after more businesses have responded, the precision increases.

5:58

Now, this gets us to the question we've heard a lot recently, which is, why even publish the imperfect numbers?

6:04

Would it be better just to hold the data until the numbers are more solid?

6:07

The data needs to come out on a regular basis. It's this punctuality of the data. Every month we get the GDP report, the unemployment report, the jobs report, and we can see trend. The trend's really the thing that we're looking at is the economy getting better, is the economy getting worse? And then I can make my changes. I can say, well, I'm not going to change my job. Things look risky.

6:28

Bill believes a lot of people who use the job's numbers would prefer imperfect over no data at all.

6:35

People that build their businesses around them, banks build decisions around them. You know, everyone wants these data, whether they're plus or minus at the same time, and it gives you ability to work in this crazy world.

6:47

One of these banks is Wells Fargo. We spoke to a senior economist there, Mike Puglisi.

6:52

In my group and my team, we are riding on the US Economy and trying to figure out where it's going and what that means for interest rates and consumer spending and business investment and what the Fed is going to do and a whole host of different questions that we and our clients have an interest in knowing.

7:16

Mike's team's reports could influence how much money Wells Fargo lends out to people and businesses.

7:22

And.

7:23

And he says the jobs numbers are

7:24

central because when you think about the US Economy at a very high level, it is predominantly driven by consumer spending. And for the average person, where does most of their spending power come from? It. It comes from their job.

7:38

We asked Mike, though, whether he would prefer the jobs numbers were withheld until they were more accurate.

7:43

I think there would be pros and cons. I mean, I think. I think if I had to come down on it, I would probably say what you want to do is get the data early, like we do now, and just be cognizant and aware that you might end up with larger revisions.

7:59

The first estimates of jobs numbers have actually been getting more reliable over time, on average. That's through better statistical techniques. But could the system be improved further

8:11

we asked Bill beach, why not automate the jobs report, you know, take information from other government departments or do things more digitally?

8:18

Now you're getting into it. So the budgets of the statistical system, BLS in particular, have not really changed at all for years, despite the big inflation that's occurred, despite all the changes in the world. Modernization cost a little money, and that's what Congress is not supporting us on right now.

8:37

On yesterday's show, we learned that the BLS had faced about a 10% budget cut since 2009. When you account for inflation, that's less money for those civil servants who painstakingly call up hundreds of businesses every month, reminding them to hand in their homework on time. This episode was produced by Corey Bridges with engineering by Kwesi Lee. It was fact checked by Sarah Juarez. Kicking Cannon edits the show, and the indicator is a production of NPR.

What you need to know about the jobs report revisions

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