How much would you do this job for? And other indicators

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0:11This is The Indicator from Planet Money. I'm Darian Woods. I'm Waylon Wong, and it is Indicators of the Week. Yes, it's that time when we look at the numbers and we see the headlines this week that drove the economy. And joining us this week is our Planet Money colleague, Amanda Aronchik. Hello. So happy to be here with you both. Ahoy, Amanda. This week, we are looking into how job growth was worse than first reported. We're looking at the botched delivery of that news and the American workers' bottom line. This message comes from LinkedIn ads. One of the hardest parts about B2B marketing is reaching the right audience.

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1:43This message comes from NPR sponsor Veeam. AI promised intelligence, but it also exposed everything people couldn't see. With Veeam and Security AI, you can see your entire data estate in real time. Learn about accelerating safe AI at scale at Veeam.com. It is Indicators of the Week. First up, Amanda. Yes. So my Indicator of the Week is a large number. It is 818 ,000. That is the number by which the Bureau of Labor Statistics overstated how many jobs there were for the past year if the year ended in March 2024. Oops. Yeah. Oops. What happened in that spreadsheet? It's not a mistake. As you guys know, the monthly job numbers are based largely on surveys.

2:30But then there are also these quarterly counts of employment and wages. It's very detailed. Every year, the BLS statisticians. They tally up those numbers and there are revisions. This is annual. Sometimes the numbers go up and sometimes they go down. Yeah, I didn't mean to be shady about the BLS. I know it's a very difficult job that we've covered on the show before about how they count these numbers. And yeah, there's always revisions, right? But the size of this was interesting. Yes. This week, former President Trump was campaigning and he, in a speech on Wednesday, said that President Biden and Vice President Harris were conspiring to keep the job numbers hidden until after the election.

3:09Of course, that is not true, but almost anything can be political these days. Yeah. And one piece of evidence that shows it wasn't being hidden was you can look at the unemployment numbers and those weren't revised. They've been ticking up a bit recently. And that's actually consistent with this idea that the job growth was not as robust as it initially seemed. Right. So you're sort of holding both things. On one hand, this is the largest revision in the past 15 years. But on the other hand, you know, job openings have slowed. Hiring beta slowed. So it's not a huge surprise. I mean, there's also this question out there, about whether the BLS numbers give the complete picture of the labor market.

3:45Yes, that is a good point. There were some quotes floating around this week from a Goldman Sachs analyst's note, and it cautioned that the job numbers that are in this quarterly report that the BLS uses to update the numbers, that it is missing the roughly half a million unauthorized immigrants who are currently working. They're just not in the data. Quite a swing. So it was too optimistic. Now it might be a bit too pessimistic. We will remain cautiously optimistic that we will keep our jobs here. All right. Thank you, Amanda. Darian, what is your indicator? On the exact same topic, but more about the execution, my indicator is 30, as in 30 minutes.

4:25For more than half an hour, investors and journalists and policy analysts were left hanging in the dark for those job revision numbers. The Bureau of Labor Statistics had said that the numbers were going to come out at 10 a.m. Eastern, but they weren't up then. I mean, this is the real oops. I should have saved my whoops for this segment. I mean, there's a lot of people out there like us who wait for these numbers. So we're like madly refreshing the website, you know, pulling our hair out, just like. I was personally a little confused that morning, but I doubted myself. Did I have the right time?

4:57But rather than doubt themselves, some finance workers decided to take action. They called the BLS directly and just asked. Bloomberg reported that people from the banks, BNP Paribas and Mazuho and others, got the numbers after calling. Love that they phoned. Yeah, the phone number's right there, but it's not meant to happen like this. You know, finance is all about getting that edge. What's that information that I have that nobody else has that I can trade on? The jobs revision was a little better than some of the dire guesses that had been putting it at around a million. So maybe I would invest in the US dollar, because in that scenario, I'd expect to be able to profit from that.

5:40Now, it is unclear whether anybody actually did trade on getting that early information, but it is the type of info that could be worth untold amounts of money. This is really bringing me back to when I used to be a financial markets reporter and we would be sending up these headlines and it would come down to the second, right? Because it's like if our subscribers got that data point a second ahead of our competitors, then it's like, oh, think of the millions of dollars they could make because we were that much faster pushing the button, right? No, totally. So yeah, this is bad. Nobody wants a system where certain financial companies can call up government agencies and get special information privately.

6:18I reached out to the BLS, and while it didn't get back to me before our deadline, it did tell Bloomberg the integrity of our data releases is BLS's top priority, and we are closely reviewing our procedures to ensure this does not happen in the future. Yeah. You know, with all this talk of shady conspiracies, like what you mentioned, Amanda, I think this is the perfect example of Hanlon's razor. Never attribute to malice that which is adequately explained by stupidity. Now, to be clear, we are not calling anybody stupid. Oh, boy. Now you're going to get a phone call from the BLS. Yeah, I'm going to get a few phone calls.

6:55But I'm saying this is an episode of the agency simply bungling the release. Okay, Waylon, you are also doing something about jobs. What do you have? My indicator is$81 ,147. That's the lowest wage that a worker in the U.S. would accept for a new job on average. OK,$81 ,147. That is a lot. How does that compare to the average salary in the U.S.? Well, just a quick kind of statistics caveat here. The BLS tracks median wages. We know that that's different from an average number, which can be skewed by outliers, you know. So the median wage in the U.S. is around$60 ,000 a year. So that is lower than my indicator, whose formal name, by the way, is the reservation wage.

7:39Like an auction. Yeah, yeah. It comes from a New York Fed survey of the labor market. And this is the question that they ask. Suppose someone offered you a job today in a line of work that you would consider. What is the lowest wage or salary you would accept before taxes and other deductions for this job? So let me ask you two, what's a line of work you would consider? Professional rat trapper. Yeah. I'm kind of ready to work in retail. I just miss people so much. I'd put me out in a store somewhere. Does this make you think about what wage, what's like the lowest wage you would accept to be a rat catcher or a retail worker?

8:16I feel like you should demand a high wage. Those are very high stress jobs. Yeah. Oh, I definitely want. I mean, what a great question, though. Like, what's the lowest I would take? It's so theoretical. I think I would go higher, honestly. Like, if we're just going to be theoretical here, like, make it 100. I don't know. How about you, Darian? Would you ask for more or less than$81 ,000 to be a rat catcher? As a New Zealander, it's our patriotic duty to eliminate all rats. OK, so we're all aware of the tight labor market, high inflation of the last few years. The number for the reservation wage, I would imagine that that has gone up.

8:48Oh, yeah, yeah. It's gone up around 30 percent between March 2020 and July of this year. Although once you factor in inflation, the increase in real terms is closer to like 8 percent. Yeah. The New York Fed says most of that increase happened at the start of the pandemic and was driven by workers without college degrees. That makes sense, especially if you think back to all of that upheaval that was happening in the service industry back in 2020. We've covered how only about half of Americans have college or associate degrees. Right. And plus, with all this investment in infrastructure and semiconductor chip factories and green energy that the Biden administration is doing, that's got to drive up demand for workers who don't have a college degree.

9:27Yes, exactly. Although now that the labor market isn't quite as rosy as it was looking before, I'll be curious to see if this reservation wage number starts to drop. Well, I hope that people maintain their high standards if the economy permits. Don't settle for less than you're worth, people. Exactly.

9:49Speaking of big pictures of the economy, Fed Chair Jerome Powell gave a big speech this morning. He said, quote, the time has come for policy to adjust. The direction of travel is clear. End quote. Huh. We're pretty sure that means a rate cut is coming. Yeah, it's the strongest signal yet that the Fed's going to cut. Maybe as soon as next month. But you know what you can get right now? Indicator merch. No need to wait for a rate cut for that. Absolutely not. Go to shopnpr.org slash indicator to check out our shirts. We also have a stuck alligator and a very lovely mug. I want one of those alligators.

10:29I've got to get on it. This episode was produced by Julia Ritchie with engineering by Sina Lafredo. It was fact-checked by Sierra Juarez. Kate Kinkin edits the show and the indicators are production of NPR.

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