Statistics (2) Employment

Trump was upset by the July 2025 payroll report (a less-than-expected monthly job add of 73,000 and a very large negative two-month revision of 258,000). He has also expressed concern that the Payroll Reports for the period leading up to the 2024 election were revised down following the election. He is correct in saying that the statistics for the last year of the Biden presidency overstated the state of the economy, but it probably did not have a huge effect on the outcome of the election (although it might have in different circumstances).

The problem is that early estimates of employment/jobs are very difficult to measure. In the United States, the payroll report is based on a survey of business establishments. This presents several difficulties. The robustness of a sample survey depends on the quality of the population frame from which the sample is selected.

The United States does not have an up-to-date register of businesses, so the sample results have to be adjusted for births and deaths of businesses. Businesses that have closed down will not respond to the survey, although they could still be in the survey. New businesses will not be included in the establishment survey because they will not be on the business register when the sample is selected. The adjustment for births and deaths can be quite large, yet they are difficult to estimate because the relative numbers depend on the stage in the business cycle.

The other problem is that funding for statistics has been cut. I read that funding for CPI surveys has been reduced, so I presume the same applies to the payroll survey as well. Getting a satisfactory response to the surveys of businesses can be difficult. There are methods that can be used to improve the response rate, but they all cost money.

In light of these difficulties, I am not surprised that the payrolls report is not as robust as commentators would like.

In New Zealand, the earliest estimates of monthly job numbers are derived from data supplied to the tax department as part of the PAYE system. There are a few issues with small businesses that have less frequent reporting requirements, but the appropriate adjustments can be estimated. But overall, the Monthly Employment Indicator is a robust statistic. It is supplemented by a quarterly survey of business establishments. The sample is selected from the business register that is kept up to date using GST registrations (value added tax), so there is less of a problem with births and deaths.