Why 900,000+ Jobs Just Got Penciled In To Disappear | Anna Wong & Danielle DiMartino Booth on -911k Non-farm Payroll Revision, Unemployment Rate, and Immigration’s Impact on Labor Market
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Podcast Summary
In this episode of Monetary Matters, host Jack Farley is joined by two prominent economists—Anna Wong, chief US economist at Bloomberg Economics, and Danielle DiMartino Booth, founder and chief strategist at QI Research—to discuss the shocking revelation that over 900,000 jobs previously thought to be created may never have existed. (01:15) The Bureau of Labor Statistics' preliminary benchmark revision downgraded job numbers from March 2024 to March 2025 by 911,000 positions, validating long-standing concerns from both economists about the accuracy of employment data. The conversation delves into the methodology behind these massive revisions, the role of immigration in distorting labor market signals, and whether the US economy is experiencing a recession despite seemingly robust financial conditions.
- Core Focus: Analysis of the largest job revision since the Great Recession and its implications for understanding the true state of the US labor market and broader economy
Speakers
Anna Wong
Anna Wong serves as chief US economist at Bloomberg Economics, bringing extensive expertise in macroeconomic analysis and Federal Reserve policy. She has developed sophisticated models for tracking labor market dynamics and has been particularly focused on understanding how immigration patterns affect employment data accuracy.
Danielle DiMartino Booth
Danielle DiMartino Booth is the founder and chief strategist at QI Research and previously worked inside the Federal Reserve for nearly a decade. She has been consistently warning about discrepancies in employment data and has developed unique analytical frameworks for tracking real-time economic conditions, particularly in cyclical sectors like construction and manufacturing.
Key Takeaways
Follow Real-Time Data Over Official Headlines
Both economists emphasized the importance of looking beyond headline employment numbers to understand true labor market conditions. (01:38) Danielle noted that they had been tracking signs pointing to net job destruction beginning in 2024 through careful analysis of revisions and real-time indicators. This takeaway highlights the critical skill of questioning official data and seeking corroborating evidence from multiple sources. For professionals, this means developing the ability to look beyond surface-level metrics and dig into the underlying trends that may contradict popular narratives.
Immigration Dynamics Create Massive Data Distortions
The conversation revealed how immigration patterns have fundamentally distorted labor market measurements, with both the household survey and establishment survey missing critical population changes. (27:57) Anna explained that undocumented immigrants tend to have higher unemployment rates (around 11%) than the general population, meaning when they're not properly counted, it artificially lowers the reported unemployment rate. Understanding these structural changes in the economy is crucial for professionals making strategic decisions based on economic data.
The Birth-Death Model Is Fundamentally Broken in the Gig Economy
Danielle identified a critical flaw in how the Bureau of Labor Statistics estimates job creation through its birth-death model. (15:57) In today's gig economy, millions of Americans create Employee Identification Numbers (EINs) for platforms like Uber or DoorDash, which the model interprets as new business births requiring employees. However, these are often solo operations with no actual job creation. This insight demonstrates the importance of understanding how legacy systems may fail to adapt to structural economic changes.
Margin Compression Precedes Mass Layoffs
Anna's analysis revealed that companies are absorbing 70-80% of tariff costs through profit margin compression rather than passing them to consumers. (50:26) This squeeze on margins historically leads to aggressive cost-cutting measures, including layoffs. The conversation highlighted how companies first exhaust other cost-reduction strategies (return-to-office mandates, hiring freezes) before resorting to layoffs. Professionals should watch for these early warning signs in their industries and companies.
Leading Indicators Trump Lagging Indicators
Danielle emphasized the critical importance of watching leading indicators like backlogs in manufacturing and services surveys rather than relying on lagging indicators like unemployment rates. (60:25) She noted that rising backlogs indicate pent-up demand building, which then drives demand for labor. Currently, backlogs remain in "deeply negative territory," suggesting continued economic weakness ahead. This approach helps professionals anticipate economic turns rather than react to them after they've already occurred.
Statistics & Facts
- Over 911,000 jobs that were thought to be created from March 2024 to March 2025 may never have existed, according to the Bureau of Labor Statistics' preliminary benchmark revision. (01:15)
- Response rates for the household survey have plummeted from 90.1% in October 2013 to just 67.1% in July 2025, significantly undermining data reliability. (18:07)
- New immigrants who arrived in the United States within the last two years have an unemployment rate of approximately 11%, significantly higher than the general population average. (35:19)
