Messy 2021 jobs reports, unreliable labor data take toll on Joe Biden

To say that the U.S. Labor Department’s jobs reports are important would be to undersell what many observers consider something of a critical economic barometer.

That data, which includes the official measure of national unemployment and monthly job creation, shapes economic forecasts. But it also serves as a potent political measure, an instant report card on the success or failure of a U.S. president’s economic plan. It can sway consumer attitudes in the short term and influence voters in election years.

An assumption that the government provides accurate numbers underpins the emphasis on the monthly update.

But now the lingering Covid-19 pandemic makes the job of collecting reliable numbers more difficult — and less reflective of the final count after revisions than in pre-pandemic times.

That means President Biden, who will mark a year in office Jan. 20, paid a political price for what were seen as “missed expectations” that appear to have helped to sour voters on his handling of the economy as the Democrats try to hold control of Congress in November’s midterm elections.

During the pandemic years of 2020 and 2021, Labor Department surveyors have had a difficult time counting job creation. Biden and most Americans have seen initial monthly figures in those years that often understate the true job growth.

The average monthly revision to the Labor Department’s jobs report has topped 100,000 so far for 2021. The figure could change, as the government has not published a final update for November and December revisions.

If that figure holds, it would mark the most extreme gap in nonfarm payrolls estimates in at least 40 years, even when adjusted for the growth of the labor force, a CNBC analysis of Bureau of Labor Statistics data found.

The effect of those revisions over time appears even more profound.

If the economy added as many jobs as first reported between January and October in 2021, the U.S. would have tallied 4.9 million jobs over that period. After revisions, though, data show the U.S. actually added 6 million jobs.

CNBC excluded November and December from the calculation because the BLS has not published its final revisions for those months. The Labor Department’s initially projected job gains of 249,000 and 199,000, respectively, for those months. That would make for a 2021 total of more than 6.4 million jobs.

The revisions have looked even more stark in specific months of 2021.

When the Labor Department first reported employment figures for last January, its month-over-month net total was a mere 49,000 jobs. After revisions, the government said January’s gain came to 233,000 jobs, more than quadruple the original reading.

Something similar happened the next month. The BLS first said that U.S. employers added 379,000 jobs in February 2021. Weeks later, the…