Auto loan delinquencies have surged to a 15-year high, highlighting the rising economic pressures faced by American consumers. A notable increase in defaults on car payments, affecting both subprime and prime borrowers, points to growing financial strain as more individuals grapple with their economic circumstances.
In parallel, a report from the Bureau of Labor Statistics, released recently, revealed that U.S. firms hired nearly a million fewer workers over the past year than earlier estimates suggested. This revision, a routine aspect of gauging the health of the country’s economy, takes on heightened significance in light of recent events. The report follows a controversial decision by President Donald Trump to dismiss the BLS commissioner after an unsatisfactory jobs report, which also included revisions of its own that indicate a more subdued economic landscape than previously indicated.
Amidst these findings, the economy added a disappointing 22,000 jobs in August, reinforcing concerns about sluggish job growth. According to Ernie Tedeschi, the director of economics at the Budget Lab at Yale, a more stagnant economy resonates with the sentiments expressed by individuals seeking employment, many of whom are struggling to find work. Tedeschi noted that prior estimations had forecasted an average creation of 146,000 jobs per month over the past year, a number that, while modest, was deemed sufficient to accommodate population growth.
The downward revision of nearly 911,000 jobs effectively halves earlier projections, revealing a stark reality where an average of 70,000 jobs per month is only sufficient to keep pace with the growth of the U.S. workforce and population. This finding draws attention to the challenges facing the labor market and the potential implications for economic recovery.
Economists emphasize that BLS revisions are not unusual and indicate the inherent complexities of collecting accurate economic data. Danny Bachman, an affiliate professor at George Washington University, explained that such revisions have historically occurred but may have escaped notice until now. He pointed out that the trade-off between timely reporting and data accuracy often leads to discrepancies that must be corrected in subsequent reports.
The BLS relies on surveys from households and businesses for its monthly jobs report, a method that can introduce errors, particularly when responses are lacking. More reliable data is derived from actual employment rolls, yet this information requires a longer collection period. The agency is expected to refine the recent revisions further, as past adjustments have shown significant changes over time.
Both Tedeschi and Bachman stressed the importance of allowing BLS professionals to perform their duties without political interference. The politicization of economic data, such as the dismissal of a BLS commissioner for unfavorable job statistics, could undermine public confidence in the accuracy of future reports. As the economic landscape continues to evolve, the focus remains on how these trends will impact American consumers and the overall economy.
