The Job Report Is a Lie.

Let me know which take you prefer.

This economy is so resilient it added 139,000 jobs in May, slightly beating projections even in the face of Trump’s tariff war and ongoing uncertainty. The unemployment rate remains unchanged at 4.2%.

Or, try this one…

The economy is showing signs of weakness as it only added 139,000 jobs in May, demonstrating a softness in the labor market on the eve of the potential impact of Trump’s tariff war and ongoing uncertainty. The unemployment rate remains at a stubborn 4.2%.

Which is it? How we count jobs and employment in this country has been the subject of great debate and the sides usually line up along ideological lines. Pundits on the right and left will look for narratives to reinforce their positions depending upon who’s in office. Once a month the headlines last for a single day, then we move on and go about our business. The trick is to dig below the headlines because there’s a lot that isn’t said when these figures are released and then there are the footnotes.

You always gotta read the damn footnotes.

Hiring Data

The big economic headline of the week was, of course, hiring data. According to the Bureau of Labor Statistics the country added 139,000 non-farm payroll jobs in May. But there was an interesting revision buried in the release we should talk about. So take a look at the trend in this chart first.

You can see that the unemployment rate is back to about 2017 levels, with the job market recovering from the COVID recession. So depending on your ideological framework you can make a case that the market is holding steady or that it’s starting to bleed out. It doesn’t really matter whether it’s beating estimates or not, what matters is how many people are working, what they’re making relative to inflation, and if there are noticeable trends to the upside or downside.

But there was something else in this job report that got very little attention and will let you know how little these figures matter when they’re released. Take a look at this little nugget that appears at the end of the release.

“The change in total nonfarm payroll employment for March was revised down by 65,000, from +185,000 to +120,000, and the change for April was revised down by 30,000, from +177,000 to +147,000. With these revisions, employment in March and April combined is 95,000 lower than previously reported.”

This is a pretty big footnote. The Bureau of Labor Statistics revised March and April together down by 95,000 jobs total so the prior months were pretty significantly overstated. The figures were already lighter than what economists predicted and it will be interesting to see if next month includes further revisions.

A couple more items to note regarding the data. Manufacturing jobs declined by 8,000 in May, which is already proof positive that you cannot simply wish manufacturing jobs back into existence with a fake (or real?, which is it?) tariff war if you’ve spent the past 40 years dismantling the industrial base of the nation, and have no clear industrial policy moving forward. The increases, by the way, were in lower wage healthcare and hospitality jobs, just to further underscore the evidence that we have moved further along the Arrighi spectrum we covered in a prior essay. There are still service sector gains, but we are fully in the financialization phase of our journey.

Think about increases in healthcare and hospitality versus manufacturing this way: Healthcare and hospitality contribute to GDP because it’s spending, right? There’s money moving around from pocket to pocket. In this case sick people to health providers; travel, leisure and restaurant consumers to hospitality providers. But these are just money movers, not product originators as in the case of manufacturing.

But I digress.

The other point of interest is that the cuts to federal agencies—another 1,000 jobs disappeared across the government sector in May—have many concerned that future data releases might be insufficient due to lack of resources. This is particularly true in the case of inflation data, so moving forward we might not even have access to some of the real-time benchmark data. That’s a whole separate issue and threat that I don’t think we spend enough time on in the Trump era.

Data collection and the ability to build public policy around it is one of the hallmarks of a mature and successful nation. The fact that the Trump administration is targeting these agencies first and foremost is more than an administration quirk. This is a systematic dismantling of an administrative state that contains evidence of wrongdoing and harm. And that is a hallmark of fascist regimes.

But I digress again.

Let’s review familiar territory to underscore the weakness in the labor market by looking at historical benchmarks and participation data. This will help draw a picture of where we are in the broader labor economy.

Remember that the unemployment rate is a severe undercounting of actual employment activity. It’s great for headlines but it’s not what economists and policymakers actually care about. What they look at is the Labor Participation Rate and the Prime Age Labor Force Participation Rate.

We’ve covered these before. The difference is, the former covers all people 18 and over who are gainfully employed and not on disability, in school or in the military. As of now that figure is 62%.

Prime age (shown above) covers employment in the 25 to 54 demographic and that figure is 83%, which is at its peak since the data was collected. So when you hear Jerome Powell say that the labor market remains strong, this is what he means.

But if we segment the data further, it begins to tell a very different story. Take a look at the participation rate of those who are 55 and over.

First off, this chart is the literal story of neoliberalism. You see the fullness of the workforce, the need for all hands on deck after World War Two as the country builds itself out of a deficit and the boom times begin. As the economy grows and social safety nets expand in parallel with rising incomes and retirements, the 55 and over crowd actually leaves the workforce and retires. But when the Boomers come of age and the effects of the Reagan and Clinton neoliberal policies kick in, you see the 55 and over crowd steadily rejoining the workforce.

The only dip since then is around COVID when so many Boomers finally raised the ‘Fuck This’ flag and dipped from the workforce permanently. Now here’s the part I want you to consider. Every year there are more and more 55 and over citizens because the Boomers are aging out, and you can see that the 55+ numbers are still declining. That means more people are entering this demographic, and fewer of them are in the workforce.

This would be a good thing if people were actually retiring with healthy savings, but according to AARP, there’s something coming called the Silver Tsunami. More than half of boomers have less than $250,000 in savings, which means they will require Social Security to live. Now that we’ve fully financialized this economy and different skills are required to maintain relevance in the modern era, older Americans aren’t just leaving the job market willingly, they’re getting squeezed out.

In our credit risk essay we shared this graphic, which shows a recent uptick in unemployment among recent college graduates.

Hold that in your pocket while we switch to employment generally among 20 to 24 year olds.

Employment in this demographic hasn’t been this low since the early 1970s, and no one is talking about it. The confluence here is actually frightening. First off, you see that this number has been steadily declining since the 1980s and it hasn’t recovered since the Global Financial Crisis (GFC).

But if AARP is warning of the Silver Tsunami, then we need a name for what’s about to happen to this demographic. This demographic, whether college grads or not, is the one that fills the entry level positions. There’s more. Anthropic CEO Dario Amodei recently joined Anderson Cooper on CNN to raise the warning flag that the models he and his contemporaries are building will very likely eliminate half of all entry level jobs in the next few years.

So we have:

• A savings tsunami among Boomers who left the workforce en masse during COVID and are not returning in a meaningful way.
• A decline in participation among the youngest workers, which includes recent college graduates.
• And according to a collaborative report between MBO Partners, the Freelancers Union and Mckinsey Global Institute, between 25–35% of the national workforce is said to have engaged in non-standard or gig economy work, which equates to around forty-one million people.

What’s not being captured in the Fed and BLS data, for example, is how many people are living on the fringes of trackable employment (online platforms like Uber that we typically associate with gig work only track about 1% of total gig work in the United States). There’s a whole sub economy out there of gig workers, part timers, freelancers, hustlers and off the book workers that are scratching to make ends meet. This is hardly the way to build an economy.

Last chart but it’s an important one.

Source: U.S. Census | Chart generated by Perplexity based on U.S. Census Projections

The population is aging. We know this. But look at how the demographic shift lays out over the next decade. The biggest decline in absolute terms is in the demographic the Fed considers “prime age.” So they can keep this game going for a while claiming that the job market is strong but the prime age workers are gainfully employed. But if they keep dropping as a percentage of the whole, then this is just sleight of hand. In other words, if the total participation of those 18 and over right now is 62%, then what’s it going to be in ten years?

Proponents of AI make the spurious claim that productivity will increase to such an extent that we won’t need as many workers and that’s a good thing. Or that we can maintain levels of labor participation but with people working fewer full-time hours. Maybe we can finally enjoy that ever elusive 30 hour workweek (Note: Sarcasm.)

If we continue down this corporatocracy-oligarchical-neofeudal-corporate colonial-inverted totalitarian path (we haven’t landed on the term we want to use for the post neoliberal era) then we are fucked. The big corporations aren’t going to pay you more to do less because AI increases productivity. We’ve already talked at length about how AI—as the CEO of Anthropic is warning us about—isn’t creative destruction in the way that we’ve gone through in the Schumpeter sense. It’s creative implosion that will eliminate half of entry level jobs and generate up to 20% unemployment.

It’s the type of economy that the 55 and over crowd will be unable to participate in. It will be hostile to the 20 to 24 year olds that fill entry level positions. If we look at recessions historically, the normal or shallow ones have led to 1.5–3 million job losses. It was closer to 9 million in the Great Recession after the GFC.

This is why we’re talking about building a civilian labor corps as one of our core policy demands. But there’s literally no one talking about it on the GOP side or the Democratic side. No one.

This labor force is going to be decimated. Trump’s tariff war, immigration policy nightmare and destruction of social safety nets and the administrative state is going to plunge us into a recession. His recklessness is going to kill countless people and it’s going to hit the red states first as we posted recently.

There is no cohesive policy to curtail the impact of AI. It’s coming. And in many ways, as evidenced by the younger demo and older demo data, it’s probably already here. Demographic shifts mean fewer people in the workforce and those older people are going to require care.

What’s the Trump administration doing to prepare for this unbelievably obvious, already happening, right in front of our eyes, actuarial reality? Dismantling the administrative state, taking away healthcare options for indigent and elderly people, and they’re coming after Social Security and Medicare next under the guise of fiscal responsibility, but it’s really because they just want to line their own pockets.

As I’ve said before. Read Project 2025. And then, to quote the estimable Gary Stevenson, “read your Dickens folks.”

The labor nightmare isn’t coming. It’s already here. The data always tells the story, it just depends on which data you choose to look at. They want you to stay focused on the prime age participation data because it not only suits their narrative today, but it will for the foreseeable future because it’s declining as a percentage of the whole. Pretty clever, no?

This is Occam’s Razor. The simplest explanation is the right one. Within a decade, half of this population will not be employed. That’s why we need a civilian labor corps and why it must be non-negotiable. The first four years of this decade are gone. They belong to Trump. Please, think about it. If we’re not prepared to make and meet this demand by the next election, then we can kiss the next four goodbye as well. And these jobs won’t all leave at once. It’s going to degrade and decline every year like a fucking mudslide. We are not prepared.

So let me channel some GOP talking points famously uttered by Eric Cantor after Obama swept the country and the republicans thought they would never take power again. It’s time to get out of the fucking fetal position and start fighting back. Hakeem Jeffries? Chuck Schumer? Really? Time to get out of the way and let the progressive take the reins, because to say we’re running out of time isn’t hyperbole. It’s math.

Learn the 5 Non-Negotiables of the Left, then get into fight mode. We’ve got work to do.

Here endeth the lesson.