BLS claps back at Philadelphia Fed report suggesting it overstated Q2 job growth
BLS said that other regional Federal Reserve Banks have often conducted their own reports but that the agency had determined their varying methodologies resulted in "lower quality data."
The Bureau of Labor Statistics is pushing back against a report from the Philadelphia Federal Reserve that suggested the government agency overstated job growth in the second quarter of 2022 by more than 1 million jobs.
"BLS does not believe that the monthly CES data dramatically overestimated employment growth, though all survey data contain error and revisions are a necessary part of the statistical estimation process to ensure accuracy," a spokesperson told Just the News.
The BLS previously reported that the U.S. economy added roughly 1,047,000 new jobs in the second quarter of 2022, a positive metric which the Biden administration cited to claim that the 46th president was successfully navigating the economic crisis. Last week, however, the Philadelphia Fed published its own figures, utilizing BLS data, indicating that the actual figure was roughly 10,500 jobs added.
It further reported that the BLS had understated unemployment numbers in 29 states and the District of Columbia by significant margins. If accurate, job growth would have been essentially flat during that period, effectively undercutting a major administration talking point.
The Fed contends that it makes use of "more comprehensive, accurate job estimates released by the BLS as part of its Quarterly Census of Employment and Wages program" as opposed to the monthly BLS data the bureau reports.
While some Republicans are accusing the Biden administration of lying about economic data to score political points, the BLS stands by its figures, arguing that the Philadelphia Fed report is the less reliable publication.
"BLS employment data from the Current Employment Statistics (CES) survey are widely recognized as a key indicator of labor market performance, in large part because of the consistent, transparent methods used to produce timely and accurate statistics," the organization told Just the News. "Once a year, BLS revises the official monthly estimates by benchmarking to BLS quarterly administrative data (the Quarterly Census of Employment and Wages, or QCEW) that is available on a 5-month lag.
"Historically, CES estimates of national employment are extremely reliable; last year, which included the effects of the pandemic on labor markets, the revision was only -7,000 or less than 0.05 percent. Using a simple methodology and a series of assumptions, the Philadelphia Federal Reserve Bank benchmarked to a less complete version of the QCEW data than is available to BLS.
"In the past, other Regional Federal Reserve Banks have conducted similar research using various methodologies. However, BLS has determined, following years of research and engagement with the Federal Reserve Banks and data users that this general approach resulted in lower quality data."
The BLS acknowledged that it had already announced preliminary revisions to its March 2022 data, indicating an "undercount of employment at the national level."
The BLS went on to highlight the Philadelphia Fed's own acknowledgement of the limitations of the data to which it had access. "The Philadelphia Fed research attempts to estimate the size of the benchmark for national and state employment changes from March to June 2022, which covers a slightly different time span than the BLS preliminary revisions," the bureau explained.
"Their methodology documentation includes the statement: 'Our early benchmark process does not attempt to be as comprehensive as the BLS process as we do not have access to all the data that the BLS uses.' BLS will release revised benchmarked national data on February 3, 2023, and state data on March 13, 2023."