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Why Jobs Reports Are Less Useful for Business

U.S. Unemployment Rate Drops To 5.1 Percent, Lowest Level Since 2008U.S. Unemployment Rate Drops To 5.1 Percent, Lowest Level Since 2008
Big companies are hiring, but often not for full-time employees. Photograph by Joe Raedle — Getty Images

It’s been 100 years since America’s Bureau of Labor Statistics started publishing its jobs numbers. This morning—and with every revolution of the moon around the earth—the independent, technocratic, no-frills Washington office carries the torch, captivating economists, businesspeople, politicians, and TV pundits with a new trove of data about the state of America’s employment situation.

But the monthly jobs report isn’t what it used to be.

For more than a decade, BLS funding has flat-lined while private-sector employment data collection and analysis have boomed. In the vaunted age of big data, the Bureau is failing to innovate and actually cutting important new programs. It shouldn’t be this way. While the private sector has a role to play in supplementing and analyzing employment data, jobs numbers are a public good: They’re supposed to be produced by an independent government agency.

Congress isn’t doing our economy any favors by scrimping on the already-small budget for employment statistics.

Funding for BLS has been falling or stagnant since 2009. Funding in the fiscal year 2016 budget is $23.7 million below what the Obama Administration requested based on realistic estimates of what it would take to fully fund the agency. The Bureau’s purchasing power is lower than it was around 2001. This means it hasn’t been able to update or refine its measures or seek to innovate in data collection or analysis. The Bureau has already had to eliminate programs, including Mass Layoffs Statistics and International Labor Comparisons—initiatives that were important for responding to recessions and identifying best practices in labor policy.

Current and former BLS officials have declared their eagerness to expand the Bureau’s work to measure the rise of independent contractors, the impact of global supply chains on the economy, and the dynamics of wage growth since the financial crisis—but there’s not enough funding available. The example of independent contractors is particularly glaring. Studies by government and private organizations estimate so-called “gig economy” jobs at anywhere from 5% to a third of the American workforce, and society will remain in the dark without more resources at the BLS.


The paltry funding shouldn’t be surprising. Ensuring solid statistics is hardly a sexy cause on Capitol Hill. But it should be. Good information is essential for good policymaking.

In the past decade, economic statistics have become more important for a range of reasons. The Great Recession ushered in an age of angst and confusion regarding the labor market. Changes like the rise of the “gig economy” and the evolution of the manufacturing sector have left policymakers, educational institutions, workforce training bodies, and business owners struggling to make sense of the jobs situation. As the Wall Street Journal recently reported, universities in particular are struggling to orient students as job titles and skill requirements shift at an unprecedented pace—whether on the factory floor or in the cubicle.

Private sector players are doing their best to meet the need. Economists, data scientists, software developers, and marketing executives at diverse firms are designing software not only to help clients analyze their performance, but also to help the public and policymakers make sense of the employment landscape. Right now, for instance, multiple firms are thinking about how to analyze and standardize job descriptions in a way that would help both applicants and public and educational agencies. As chief economist for an HR software company, I’m focusing on how to use proprietary data to provide finer-grain details than what’s available in most publicly available data—such as the location of new jobs vs. candidates (both successful and unsuccessful) by metropolitan area, as well as the channel by which the applicant found the job. The goal is richer statistics, useful for job candidates, employers, educators, and policy makers.

The cumulative effect of these private sector efforts—including the development of proprietary data and analysis tools—will no doubt supplement BLS activity. But we in the private sector are under no illusion that we can fill the gap.

There’s simply no firm or consortium that can match the federal government’s ability to collect objective data and aggregate it into useful material for policymakers. Employment statistics support essential public functions—from setting interest rates to shaping presidential agendas—so taxpayers should support their development.

The cause of better statistics could win a bipartisan following. Last year, Pennsylvania Republican Mike Fitzpatrick and Michigan liberal John Conyers teamed up to host a Congressional briefing focused on the need for better employment numbers. While funding for federal agencies traditionally has more resonance on the left, we need look no further than Donald Trump’s recent remarks that the real unemployment rate is as high as 42% to see the right’s recognition that statistical agencies need to improve their game.

Congress can rectify the situation. In the coming months, lawmakers will be considering the fiscal year 2017 budget and will have another opportunity to fully fund BLS so the agency can start making necessary upgrades.

The first Friday of the month is still a hallowed day in the economics profession. But the date is only as meaningful as the data that the Bureau can provide. Americans can’t keep taking labor statistics for granted.

Josh Wright is a chief economist for iCIMS, a leading HR software firm, and a former Federal Reserve economist.