HN Reader

If unemployment continues to rise, and the one-time impact on prices of tariffs leads to self-reinforcing high inflation, we'll have stagflation:

https://en.wikipedia.org/wiki/Stagflation

I sure hope not, because stagflation would be extremely unpleasant for everyone. Central banks like the Federal Reserve would be forced to raise interest rates, to put stress on businesses and consumers, so businesses find themselves unable to raise prices further and consumers find themselves unable to demand greater pay at work.

Raising rates to put stress on businesses and consumers is the only method known to work for ending self-reinforcing high inflation. It's what Paul Volcker did at the Federal Reserve in response to the stagflation that started in the early 1970's in the US and other countries, after OPEC raised oil prices. Volcker raised the federal funds rate in fits and starts to a high of 20% in 1981:

https://en.wikipedia.org/wiki/Paul_Volcker#Chairman_of_the_F...

It worked. Volcker's actions are widely credited with ending self-reinforcing high inflation. His actions also triggered a recession.

Stagflation itself triggered a stock market crash in 1973-1974. It took over 20 years, until 1993, for the US stock market to recover:

https://en.wikipedia.org/wiki/1973%E2%80%931974_stock_market...

Like I said, it would be extremely unpleasant, for everyone. I hope we don't end up with stagflation.

I think it's interesting that everyone's immediate reaction now-a-days is to assume incompetence or maliciousness, rather than curiosity at the root cause (very telling this attitude has even permeated a forum for supposed 'hackers').

A high-level is that 80% of the economy is very easy to track b/c it's not very volatile (teachers, for example).

What we have seen is a huge surge in unpredictability in the most volatile 20% of jobs (mining, manufacturing, retail, etc.). The BLS can't really change their methods to catch up with this change for classic backwards compatibility and tech debt reasons.

Part of the reason 'being a quant' is so hot right now is that we truly are in weird times where volatility is much higher than most people realize across sectors of the economy (i.e. AI is changing formerly rock-solid SWE employment trends, tariffs/electricity are quickly and randomly changing domestic manufacturing profitability, etc.). This means that if you can build systems that track data better than the old official systems, you can make some decent money investing against your knowledge.

I think this is a bad state of affairs, but I don't have a good solution. Any private company won't release their data b/c it's too valuable and I am reluctant to encourage the BLS to rip up their methods when backwards compatibility is a feature worth saving.

Q: Hasn't the US monthly jobs figure frequently been revised downwards over recent years, regardless of which administration was in charge?

(edit - see for instance Aug 2024: https://seekingalpha.com/news/4142722-why-was-there-such-a-b... )

Not to be a Doomer but the last time I recall a revision around this magnitude was during the GFC[1].

   Summary of the benchmark revisions The March 2009 benchmark level for total  nonfarm employment is 131,175,000; this figure is 902,000 below the sample-based estimate for March 2009, an adjustment of -0.7 percent. Table 1 shows the total nonfarm percentage benchmark revisions for the past ten years.

https://www.bls.gov/ces/publications/benchmark/ces-benchmark...

People often get hyper-focused on a single cause, but there is a whole range of forces driving a sharp decline in jobs. All of this is visible, yet we are marching toward an economic crisis of our own making. I believe the best term for this is "gray rhino".

* Tariffs and Trade Uncertainty – Elevated tariffs and rapidly shifting trade policies are raising costs for manufacturers and discouraging hiring and investment (Investopedia; Atlanta Fed survey; CBO analyses).

* Automation and AI Displacement – Automation and AI, especially in low-skill occupations, are reducing new job creation and wages for some workers (academic studies in arXiv and PMC).

* Restrictive Immigration Policies – Tightened immigration and visa processes are straining labor supply, particularly in sectors that rely on immigrant workers (Axios, 2025 labor coverage).

* Small Business Strain from Economic Pressure – Tariff-related uncertainty is leading small businesses to slow hiring or lay off employees (Joint Economic Committee report, 2025).

* Offshoring and Outsourcing Trends – Technological advances are enabling offshoring and automation, substituting domestic labor with remote or machine-based alternatives (academic research in World Development, 2024).

How does this compare with the ADP figures for the same time period?

if anyone else is curious, beyond all the political football stuff happening with the bureau of labor stats, Odd Lots did a good episode recently on the challenges with monthly jobs reports

Again? So is that head of the Bureau of Labor Statistics gonna get fired again?

Austerity has repeatably been shown to kill economic growth and trigger recessions/depressions. Yet for whatever reason there is one party in congress who's entire economic policy is basically austerity measures. Repeatedly, the ax man comes in and cuts spending that generates multiples of economic activity in return. This happens all the time cut a $1 here and it costs $4 over there kinds of things. Infrastructure is frequently in this category, delay maintenance until it can't be repaired, or simply fail to invest until a road/bridge is gridlock 18 hours a day, or the train is to scary to ride. The current admin is doing this 10x because they aren't being smart about what they cut, just doing it for political points.

Is there government waste? Sure, but that requires micro tweaks, aka instead of hiring more TSA agents maybe decide they shouldn't be randomly selecting every 3rd precheck user for additional screening/etc, or maybe decide that investing in even slower scanners isn't the right choice. Plus, in TX having seen some of these contracts the city/state gives out, the idea that private industry is more efficient is laughable. In some cases they are basically contracting out for millions of dollars a year a job that could be handled by one or two actual government employees paid less than $100k a year.

Why doesn't BLS use data directly from Social Security?

Everyone with a W2 pays into SS. SS also has everyone's birthdate, so it's easy to bucketize everyone into "can work" and "can't work."

They can join that with Medicare/Medicaid data to find people with disabilities. The can compare pay periods to see who's unemployed etc. They can find people on disability with help from Medicare.

Why is BLS waiting for state data? To find the unemployed and collecting?

the economic impact of everyone knowing you can't trust government data on the economy is gonna be fun to watch. they can pretend, and they can make us pretend, but they can't make us forget that we're pretending.

Thanks armchair accelerationist voters

>the Labor Department’s Bureau of Labor Statistics said Tuesday.

Can they be trusted anymore since Donald is now dictating what they say?

I do find it encouraging that there’s not a lot of pro-Trump sentiment on HN these days. Unlike, say, in October/November 2024…

The revisions cover March 2024 through March 2025. While his policies may deliver turmoil in the near future, I don’t understand why most of the discussion here is about Trump. Furthermore, these revisions are at the high end of estimates, so it’s not a complete shock. The Fed and financial institutions must have already had an idea that the job market could be this bad.

I think our society has become so efficient that we definitely need Bullshit jobs to keep the economy going. Please Uncle Sam print money and give it to companies so that it trickles down to us as serve our employers. Bring Zirp back.

Amazing how many here are so quick to lay the job numbers from last year at Trump's feet.

But also a million self-deported. So I guess it's an equilibrium.

So the federal reserve has been operating on bad intel for years? OMG

I am honestly surprised considering everything we have seen regarding the reporting of the jobs report that people are taking this on face value. I think it’s more likely the numbers are being deflated to give the current administration an excuse for the recent downturn in hiring that their policies have caused.

Given that Trump recently fired his head of labor statistics, because he didn't like what was being reported, I'd take this with a grain of salt. Presumably whatever numbers are now being released are whatever "alternate facts" he wants to put out.

There could be various reasons Trump wants to report bad numbers, such as pressuring the Fed to lower rates, or to establish a horrible baseline from which he can then report improvement on by the midterms.

It reminds of the soviet union reporting all sorts of bogus improvement statistics by implicitly using the worst possible baseline they could - from decades earlier.

First, political commentary should be regulated, especially from these moron podcasters! What the hell do they know? They are angry and out with an agenda!! Just to make their living from barking instead of doing a meaningful/real job.

Also, I'm not sure why it's allowed to have someone come from SA/Zimbabwe and comment on posts of US political candidates.

Now coming to the Right! I believe they are the single biggest reason behind America's current rot. Which problem are they trying to solve? They always contradict themselves.

This is the mindset we are forced to deal with https://x.com/ENERGY/status/1964010741247168958

It should be compulsory for voters to vote and have them go through training to make them understand how the economy, the Fed, world trade, US intelligence, foreign policy, interest rates, and bonds work. One might argue that it should be done in the schools. Sure! But then why are we here? Of course, Right would scream as usual No, my choice. No son! Enough with your damn choices. Not voting should invite severe legal, financial, and civil penalties. That's how we are going to fix this mess!

What I really fail to understand - how can departments like BLS screw up to this extent. Either they are grossly incompetent or they are intentionally corrupt.

The data covers the period from March 2024 to March 2025 and trims the average monthly jobs gains seen during this period (roughly the last 10 months of Joe Biden's presidency and the first two months of Trump's) from a monthly average of 147,000 to about 71,000.

50% error. This is more or less consistent. How can a department have this error % and still have their job. I understand the data collection mechanism is not the most sophisticated, but even accounting for that, this consistent error % is not to be overlooked.

I wonder why there is such lack of accountability from firms whose data pretty much feeds the world's economy.