NFP estimates since April 2024 have likely been overstated by about 60,000 per month due to adjustments for births and deaths. Actual job growth will likely be much weaker in 2024 than the market initially envisioned. Demand for labor began to decline months before the migration crackdown, Standard Chartered economists Steve Englander and Dan Pan reported.
The year 2024 was not as golden as it seemed
“Fed Chairman Powell indicated at the December FOMC meeting that non-farm payrolls data were likely overstated by 60K per month given the upward bias from the BLS adjustment for births and deaths (BD). Our estimate of overstatement is 70K, but we will use Powell’s 60K in this report. Moreover, we agree with Powell that overestimation persisted beyond the initial downward revision already announced in March 2025.”
“The puzzle we face is that after all the talk about immigration driving employment growth, 2024 turns out to be far from great when revisions are taken into account and we assume a 60,000 overstatement. The conventional view is that immigration boosted employment growth in 2024 before falling sharply in 2025. However, our calculations show that labor demand had fallen well before the Trump administration began the crackdown on immigration.”
“After correcting for bias, ‘actual’ non-farm payrolls will likely average 70K between April and December 2024, while preliminary data releases had them averaging 150K per month. If we use the QCEW data and other regression methods to support non-farm payroll growth between March and December 2024, we will find larger downward adjustments.”
