No Jobs Friday

Episode Summary

Executive Summary: The episode centers on the delayed U.S. jobs report during a government shutdown and how private labor data providers like Revelio Labs are filling the gap. Lisa Simon explains Revelio’s LinkedIn-based methodology and argues the labor market is stalling rather than collapsing, with hiring weak, layoffs still low, and uncertainty, tariffs, immigration, and AI all weighing on firms.

Main Topics: Shutdown and the missing jobs report (Priority: 5/5): The hosts discuss the absence of the BLS jobs report due to the government shutdown and how unusual it is for labor-market watchers who rely on Jobs Friday data. Trust in government labor statistics (Priority: 5/5): The group debates whether BLS and other federal data remain trustworthy, concluding that the issue is more underfunding, higher noise, and weaker survey response rates than bad-faith manipulation. Revelio Labs methodology (Priority: 5/5): Lisa Simon details how Revelio scrapes public professional profiles, job postings, salary data, and layoff notices, then reweights the data to match the broader workforce and nowcasts monthly employment. State of the labor market (Priority: 5/5): Using Revelio, ADP, Challenger, and other indicators, the panel characterizes the labor market as stalled/sputtering: hiring is weak, layoffs remain low, and employment growth is concentrated in a few sectors. Sector and occupation breakdowns (Priority: 4/5): Revelio’s September data show strength mainly in education and health care, while leisure and hospitality, tech, finance, professional services, and legal are weak; retail is mixed and government is down. Break-even job growth and labor-market outlook (Priority: 4/5): The panel estimates break-even job growth around 50K-75K and underlying growth near zero to 25K, but uncertainty over immigration, tariffs, AI, and profits makes the outlook fragile. Stats game and labor signals (Priority: 3/5): The hosts play their recurring guessing game with labor-market stats, highlighting shutdown history, H-1B visas, Challenger layoff announcements, and consumer labor sentiment.

Key Arguments: Government labor statistics should still be trusted as the baseline gold standard, but underfunding and low response rates have increased noise and reduced timeliness. One jobs number matters less than the trend; month-to-month volatility can obscure the true direction of labor-market cooling. Revelio’s data can serve as a useful real-time complement to BLS because it covers a large share of workers and can be reweighted to the economy. The labor market is not in free fall; it is more accurately described as stalling, sputtering, or stuck in the mud. Job growth is narrow: education/health care are carrying much of the gains while several cyclical and entry-level sectors are weak. Layoffs are still low, but if demand softens further, layoffs are likely the next shoe to drop after hiring freeze, reduced hours, and unfilled openings. AI, tariffs, immigration, and profit-margin pressure are all contributing to uncertainty that keeps firms from hiring aggressively. Break-even job growth likely exceeds current underlying growth, meaning even modestly negative prints would be concerning if sustained.

Data Points: Revelio September employment estimate: 60,000 - Lisa Simon said Revelio estimated U.S. job growth at 60K for September. ADP September employment estimate: -32,000 - Referenced by the panel as another private-sector labor indicator for the same month. Revelio model comparison to BLS: 37,000 - Lisa said a simple regression of Revelio on ADP predicted a BLS-like result of 37K. Profiles tracked globally: about 30 million companies - Revelio tracks employment across global firms. U.S. worker profiles collected: about 120 million profiles - Lisa said Revelio scrapes nearly the full U.S. workforce on LinkedIn/public profiles. High-signal profiles after cleaning: about 105 million profiles - After filtering interns, part-time workers, and low-information profiles. Median reporting lag: about 3 months - Used in Revelio’s nowcasting model because workers update profiles with delay. Reweighting frequency: about once a year - Lisa said full reweighting to government benchmarks is not needed monthly. CPI imputed prices at start of year: about 10% - Dante cited earlier-year CPI imputation levels as an example of data quality concerns. CPI imputed prices more recently: up to 35% - Dante argued the rise in imputation shows erosion in data quality. Government shutdown delays to jobs report since early 1990s: 4 times - Lisa found four prior shutdown-related delays: twice in 1995-96, once in 2013, and the current one. H-1B visas granted in 2024: 139,691 - Lisa’s stat game answer; the hosts rounded it to about 140K. H-1B cap for private businesses: 85,000 - Lisa noted the annual cap before non-cap allocations. Challenger year-to-date announced job cuts: 946,426 - Chris’s stat game answer; Lisa identified it as Challenger Gray & Christmas data. Challenger layoffs change vs. last year: up 55% - Year-to-date announced job cuts were said to be sharply higher than a year earlier. Conference Board labor market differential: 7.8 - Dante’s stat: jobs plentiful minus jobs hard to get, at the lowest level since 2017. 2022 peak in labor market differential: 47.1 - Used as the prior high for the Conference Board measure. Revelio salary growth month over month: -0.3% - Lisa said advertised new-hire salaries were slightly down m/m. Revelio salary growth year over year: 2% - Lisa said new-hire salary growth was modest on a yearly basis. September layoff notices/effective layoffs: up for the first time in a while - Lisa said WARN-based layoff measures ticked up in September. Government employment: down - One of the weaker sectors in Revelio’s monthly breakdown. Leisure and hospitality employment: down the most - Lisa and the hosts flagged it as a negative consumer-demand signal. Education and health employment: main source of growth - These were the dominant sectors adding jobs in Revelio’s data. Retail trade employment: okay month over month, down year over year - Lisa described it as short-term stable but structurally weak. Underlying job growth estimate: close to zero to 25K - Range discussed by the hosts and Lisa as a rough underlying trend. Break-even job growth estimate: about 50K to 75K - Panel consensus on the pace needed to keep unemployment stable. Current unemployment rate: 4.3% - Referenced repeatedly as still low but edging higher.

Pivotal Quotes: "I don't want to live in a world where we don't have government statistics." — Lisa Simon: Her response to questions about whether federal labor data can still be trusted. "I think it's like in free fall. So it's not in free fall, I don't think we're there, but it's sort of like, yeah, stalling, I suppose, is the sputtering, maybe is the right objective." — Lisa Simon: Her characterization of the current labor market. "The labor market is not in free fall; it is more accurately described as stalling, sputtering, or stuck in the mud." — Mark Sandy / panel framing: The hosts’ synthesis of Revelio data and broader labor indicators.

Implications: Listeners should expect weak near-term labor data, more reliance on private indicators, and rising sensitivity to shutdown-related data gaps. If layoffs tick up, recession risk rises; if hiring rebounds, the slowdown may remain contained.