Total Employment to be substantially revised higher early 2025 when the BLS incorporates these up-revisions into its household survey employment data.
By Wolf Richter for WOLF STREET.
The Census Bureau released its updated population estimates with data through July 2024 today, which corrected its vastly underestimated figure of immigrants for the past few years.
The prior Census Bureau data had so inadequately measured the tsunami of immigrants in 2021 through 2024 that it left policy makers, such as the Fed, in the dark about the supply of labor, employment, etc. To provide some insights, the Congressional Budget Office released its own estimates of population growth earlier this year, by incorporating data from Immigration and Customs Enforcement.
Today’s data by the Census Bureau confirms that it was truly a tsunami of immigrants that washed over the land. And now it’s official.
The US population surged by 8 million people in the three years from July 2021 through July 2024, to 340.1 million, according to the updated estimates from the Census Bureau today.
The 3.3 million net increase over the 12 months through July 2024 was the largest in decades. And the biggest portion of increases came from net-immigration (those that came in minus those that left or were removed):
- 2022: +1.92 million, incl. 1.69 million net immigration
- 2023: +2.80 million, incl. 2.29 million net immigration
- 2024: +3.31 million, incl. 2.79 million net immigration
In terms of the 2.79 million net immigration in the 12 months through July 2024, the Census Bureau said in its note about the improved methodology that this was “significantly higher than our previous estimates, in large part because we’ve improved our methodology to better capture the recent fluctuations in net international migration,” by among other things using “newly available administrative data [including from the Department of State Bureau of Consular Affairs and Refugee Processing Center; and from Homeland Security] to adjust the usually survey-based estimates of foreign-born immigration.”
“Improved integration of federal data sources on immigration has enhanced our estimates methodology,” The Census Bureau said.
All immigration figures here are regardless of legal status.
In percentage terms, the population increased by nearly 1% over the 12 months through July 2024, the biggest percentage increase since 2001.
Over the three years through July 2024, the population increased by 2.4% (by 8.0 million people):
Coming Up-Revisions of Total Employment & Labor Force.
Early next year, the Bureau of Labor Statistics will incorporate these new population data into its employment-related data obtained from the household survey and substantially revise up its figures for labor force, total employment, and unemployment, and the metrics derived from those.
The household survey data – labor force, employment, unemployment, etc. – has been in the fog for two years due to this large underestimation of the working new arrivals and new arrivals still looking for work.
For the BLS employment data, legal status of the workers is irrelevant. It’s not even part of the data.
The newly arrived immigrants who either already have a job or are looking for a job count in the labor force, regardless of legal status. If they’re working, they count as workers, regardless of legal status. Those that have not found a job yet, but are looking for a job, show up as unemployed regardless of legal status.
So we expect large up-revisions of overall employment, the labor force, unemployment, and related metrics.
But the up-revisions might not move the unemployment rate much since they would largely cancel out in the calculation of the unemployment rate: up-revised number of unemployed divided by up-revised labor force.
The up-revision should re-establish the historic difference between total employment, which is based on the household survey and population data (red line in the chart below) and nonfarm payroll jobs, based on data from establishments (blue).
That long-established and normally fairly stable difference between total employment and nonfarm payrolls is mostly caused by certain self-employed workers and farm workers not being included in nonfarm payrolls, but being included in total employment.
By not adequately accounting for the newly arrived immigrant workers, total employment (red) stopped growing and even declined a little since early 2023, while nonfarm payrolls have continued to rise at a solid pace as employers reported their immigrant workers on the establishment surveys (blue).
The coming up-revision of total employment in the household survey should raise the red line and re-establish the typical difference to the blue line.
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Hi Wolf. Does this include illegal/undocumented immigrants also? What would be the implication of Trumps proposed policy of sending back illegal immigrants? Thanks
Yes, All immigration figures here are regardless of legal status.
The current stock market bubble is so massive that if you divide the price of just the top 8 stocks by 340 Million population you will have close to $60K per person. We could all get a Tesla.
Back of a napkin calculation, so give or take a Trillion. I added Broadcom to Mag 7 since it crossed $1 Trillion this week.
Don’t forget to subtract each person’s share of the US national debt. $36.1 trillion divided by 340 million is $106,300 per person.
Ugh…… those stocks aren’t just bought by Americans. It’s a big world out there.
US companies are selling their stuff to the entire world, it’s not a really good referential to compare their sales to the US population
It’s no wonder thete is such a distrust in our government! Kind of wonder about the “timing.” WHY NOW & not 3-4 months ago?
Turns out, it didn’t matter.
Everything that happens after Nov 5, triggers “why now” and it was all “politically motivated,” including when your car warns you that it needs an oil change? Do you people ever run out of BS to spread? I mean, run into a BS shortage?
This was the ANNUAL SCHEDULED revision of the Census Bureau’s population estimates. They do this EVERY YEAR at this time. We already knew it would be big, and I have been talking about it here for months. And we already had the estimates by the CBO earlier this year, which I also posted here, and they were pretty close to what the Census came up with:
https://wolfstreet.com/2024/04/03/how-the-huge-wave-of-immigrants-into-the-us-in-2022-and-2023-impacts-the-employment-data-of-the-bls-household-survey/
Past news reports said that it was mainly single working age men entering the country; looks like we found the reason labor and jobs are in better alignment like Jerome Powell said the imbalance helps cause inflation. Seems like these new arriving people should be welcomed.
you’re assuming that immigration is purely about the labor market. there are a lot of cultural impacts mass migration causes to the host society. some are positive, and some are negative.
discounting the negatives is in large part why discontent is so strong throughout the western world.
Well said Franz G. It’s not all “economic”. And “the voters” thoughout the west are speaking (USA, Germany, France, Canada, etc…)
And the Fed runs around like a chicken with its head cut off trying to figure out why inflation is running higher than expected. Granted, there are other contributing factors, but the subject of this article is certainly squarely in the mix. And yet the Fed has cut a full 100-BP, when 25 back in Sept would have sent the signal, they were ready to cut based on month-to-month data. Well, we all know what the data is telling us: we’re in a holding pattern until Trump gets into office. We’ve known there was this great uncertainty with a real risk for inflation to the upside for the last two rate increases. It just doesn’t make sense, unless the Fed is trying to push down short-term rates without starting up QE. $6-7T in treasuries roll over next year to mostly bills & 2-3 notes. That’s a lot of interest expense.
“And the Fed runs around like a chicken with its head cut off trying to…”
Nope. The Fed has been talking about the wave of immigration all year.
For the Fed, this is a NEW SUPPLY OF LABOR, that helped loosen the tight labor market and labor shortages of 2021-2022. And for the Fed, this wave of immigration, by providing supply of labor and thereby keeping wage pressures in check, has helped REDUCE inflation pressures.
In addition, the Fed has been talking about this supply of labor when it shows up in the unemployment rate… that the unemployment rate ticked up from the historic lows in 2023 not through reduced demand for labor, but increased supply of labor. And I have discusses this here as well.
Powell and other Fed governors have been explicit and vocal about this because this huge supply of labor did have a large impact.
I have also described here how this influx of people has created new demand for goods and services, and that this new demand has helped keep consumer spending in a stronger growth mode than normal, despite the higher interest rates.
“And for the Fed, this wave of immigration, by providing supply of labor and thereby keeping wage pressures in check, has helped REDUCE inflation pressures.”
And from a policy standpoint, this is bad for American workers, driving down wages & driving up unemployment. That’s a double whammy which doesn’t even come close to quantifying all the other potentially negative outcomes. CHEAP LABOR, no matter what the cost which is kind of a problem with the Fed, I believe. They should weigh in somehow with specific details about your point, so Americans can better decide about the cost vs benefit. Most, I would imagine wouldn’t be swayed by whatever the Fed had to say.
And despite all you’ve said about the Fed being intune with robust immigration and its effects on inflation, they’re still cutting, when it’s pretty darn obvious that the overall demand side is stripping away the benefit of the lower wages.
So the question for you is: do you think the Fed has cut rates too much? That’s ultimately what I’m talking about here, and I know it’s very unlikely you’ll answer the question directly which is fine.
The mass immigration seems like a double whammy to the American working class. The new supply of labor puts downward pressure on wages, while the new demand for goods and services puts upward pressure on prices, like rent, food, and other necessities…
Hence the frustration
Huge numbers of immigrants in recent years are a big reason for the massive inflation in rents in house prices in the USA and Canada.
“this wave of immigration, by providing supply of labor and thereby keeping wage pressures in check, has helped REDUCE inflation pressures.”
What is the affect of this additional supply of labor on rent in the areas the immigrants are drawn to?
Looks like a return to trend after COVID. Hopefully this will help Social Security make payments well into the future.
Are there any material follow-on implications to per-capita (GDP, spending or debt, etc) calculations? Or any population related data?
This population data – the massive increase in workers and consumers over a three-year period – is important for much of our understanding of the economy, which is why I posted it as a special article. And you will see me refer to it and link it many times going forward, much like I have referred to the CBO’s estimated of this data over the past 8 months.
As I described in the article, revision of the population data will cause big up-revisions in the jobs report’s employment data. In terms of the consumer spending and income data, I’m not sure. They were just revised a lot higher for the past two years, with smaller revisions going back to 2019. This is done every fall, so we won’t see that for another 10 months. All per-capita data will be impacted by it as data providers start using the revised population data. There will be other impacts.
For comparison, Canada’s population grew, on a proportional basis, more than twice as fast as the USA….and Canada still has a labor shortage. Demographics is the slow killer of any economy, just look at aging/depopulating Europe.
Don’t tell the surging ranks of unemployed people in Canada that there is a labor shortage in your mind (since you’re a Canadian expat living in a poor country in Africa with huge and reckless population growth). Canada’s unemployment rate has surged from 5.0% in 2023 to 6.8% now. Which is why the government is reversing some of its immigration policies, and which is why the BOC has cut rates so far.
Mostly illegal entry I would take it ? It’s pretty shocking a Government or President would allow this
it’s not shocking if a government’s goal is to destabilize the nation.
It is not shocking if the goal is to provide cheap undocumented labor.
WOW, people are freaking out about all the immigration like it was a bad thing, but without it we’d be pretty damn close to tipping into a shrinking population. Shrinking AND aging, aka the Japan scenario.
Population decline is just about the worst thing that could happen for the economy, it would likely mean permanent recession (year-over-year GDP declines).
It’ll be interesting to see what happens over the next 4+ years; if it’s a more extreme decline in the population growth chart than what we saw 2016-2020 then we’re headed for a massive crash.
P.S – USA life-expectancy has been going down, so maybe that balances out the equation 🙃
WOW, and I am tired of people talking about immigration like it’s only a good thing and improves the economy. I live in NYC, and I can list a million things that are bad about uncontrolled immigration that allows only people from third-world countries. If you need more workforce, start giving more work visas to people needed in certain sectors after they have been vetted, etc. Because otherwise the quality of life goes down to shit…