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Revised Data on Employment & Unemployment

The Bureau of Labor Statistics has issued its first round of employment data revisions for the year, publishing revised statistics for unemployment and employment as measured by the Household Survey and published in the Local Area Unemployment Statistics (LAUS) database.  As expected, the new data show that the sharp dip in unemployment recorded in mid-2023 was not as large as originally reported. Instead of showing a dip to 2.6% in June and July, the revised data show that the unemployment rate bottomed-out at 2.8% in March and April.  The new data also show a more pronounced rise in the unemployment rate over the second half of 2023, with the December rate being revised upward from 3.4% to 3.7%.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

As shown above, the significant revisions to the unemployment rate data mostly affected the period since mid-2022. However, the extent of the revisions went back to 2019. The unemployment rate closely tracks the number of unemployed, for which the revisions produce the same patterns shown above. The new data show that the number of unemployed dropped to just under 40,000 at its low point, rather than falling as low as 35,600 in the previously published data.

Revisions to the number of employed were subject to more extensive revision.  The new data show that the drop in employment back in April of 2020 was a bit sharper than previously reported, and that employment growth since then has not been quite as rapid.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Labor force data was revised in line with the employment revisions.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

As a result of the downward revision to the labor force statistics, the labor force participation rate would be also expected to show a slower recovery from the pandemic-related decline in 2020 and 2021. However, updated population statistics from the 2020 census showed a downward revision as well, partly offsetting that effect. As a result, the revised data show a participation rate of 57.5%, only slightly lower than the 57.6% rate previously reported.

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

New data on unemployment for January, along with revised data from the Establishment Survey, will be reported on March 11th.