Jobs hallucinations
Tuesday morning, the Bureau of Labor Statistics dropped a bombshell that should terrify economists and workers alike: They hallucinated nearly one million jobs that never actually existed between March 2024 and March this year. While some revisions are normal, this is a record-setting high in either direction. For the last eighteen months, we’ve been making policy decisions based on phantom positions that existed only in government spreadsheets.
Revisions to estimated job creation statistics are standard procedure – the BLS always adjusts preliminary estimates when more complete data arrives. But the scale of what’s been happening lately is unprecedented: May’s numbers were slashed by 125,000 and June’s by 133,000, a combined quarter of a million phantom jobs on top of yesterday’s numbers, that simply never existed.
Any doubt that the Federal Reserve will begin cutting interest rates has all but vanished in light of these revisions. This is their go-to playbook for recessionary environments: Cutting interest rates means that individuals and companies can borrow more freely, which stimulates economic expansion – historically necessitating hiring, which boosts employment and stimulates spending, and so on.
Or that’s been the theory historically, anyway. That link is now broken. Companies can now scale operations, write code, and expand their operations without adding a single employee – AI and automation have begun to sever the relationship between growth and employment. Lower rates will continue to stimulate investment, but that investment can now flow freely into automation and AI systems rather than creating new jobs.
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These hallucinations happened during teh Biden administration and were uncovered by the Trump administration. I get the impression that Biden wanted to cook the books for political reasons.
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