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This Week in Apps: ChatGPT app scammers, Instagram revamp and a consumer spending slowdown

Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy….

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Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.

The app economy in 2023 hit a few snags, as consumer spending last year dropped for the first time by 2% to $167 billion, according to the latest “State of Mobile” report by data.ai (previously App Annie). However, downloads are continuing to grow, up 11% year-over-year in 2022 to reach 255 billion. Consumers are also spending more time using mobile apps than ever before. On Android devices alone, hours spent in 2022 grew 9%, reaching 4.1 trillion.

This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and much more.

Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters

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State of Mobile 2023 arrives, consumer spending slows

Data.ai’s anticipated review of the app ecosystem, “State of Mobile 2023,” arrived this week, finding that consumer spending on apps has been hit by the same macroeconomic forces impacting the broader economy. That led to a first-time drop in consumer spending after years of record growth. However, there are some bright spots in the report’s findings. For starters, it seems that non-game apps are more resilient than games in a down economy. Though consumer spend on mobile games dropped 5% to $110 billion, spending on non-game apps increased 6% to $58 billion — driven by streaming subscriptions, dating apps and short-form video apps.

Image Credits: data.ai

The data also indicated that despite the tightening of wallets, consumer engagement on mobile continues to grow. Across top mobile markets, consumers were spending 5 hours, 2 minutes per day in 2022 using their apps, up 9% from 2020. That’s remarkable, given that 2020 was the onset of the COVID pandemic, which tied everyone to their phone and rapidly changed consumer behavior. However, there is a caveat to this news: Much of mobile users’ time is monopolized by three app categories, which accounted for half the time spent on mobile: Social Media/Communication (19.5% of total time); Entertainment/Short Video (17% of total time); and Entertainment/Video Sharing (12.7% of total time).

Image Credits: data.ai

In addition, while mobile ad spend growth will also slow alongside the economy, it will not decline. Data.ai is forecasting that mobile ad spend in 2023 will hit $262 billion, up from $336 billion this year as short video apps drive growth. TikTok, for example, became the second-ever non-game app to top $6 billion in all-time consumer spending, the report noted.

The first category — Social Media/Communication — includes WeChat, WhatsApp, Facebook, Messenger, Telegram, LINE and Discord, while the Entertainment and Short Video category is where you’ll find TikTok as well as Kwai, Vido Video, Baidu Haokan and Snack Video. The last category of Entertainment and Video Sharing includes long-form video like YouTube, YouTube Kids and bilibili.

Image Credits: data.ai

One finding that jumped out at me is that TikTok this year lost its No. 1 position on the Top Charts by Downloads to Instagram, the Meta-owned social app that has been desperately trying to clone TikTok’s feature set with Reels. Data.ai’s report indicated that Meta had a bit of a comeback this year, with Instagram bumping TikTok on downloads, though TikTok remained No. 1 by consumer spending. However, in terms of real-world use, TikTok is much further down the charts.

In 2022, the top four non-game apps by monthly active users were all owned by Facebook. In order, they were Facebook, WhatsApp Messenger, Instagram, then Facebook Messenger. TikTok was No. 5. Amazon, which was No. 5 last year, slipped to No. 7 while Telegram moved up to No. 6 from No. 7 in 2021. Twitter, Spotify and Netflix rounded out the charts.

Image Credits: data.ai

The report delves into other interesting trends related to specific categories of apps (some of which we may get into later), but one particular area of interest to us involved the detailed habits of Gen Z consumers. Unlike the top apps used by older generations, which tend to be more utilitarian and practical (think Amazon, eBay, Walmart, The Weather Channel, Waze, Ring, PayPal and others), Gen Z is still devoted to video apps, user-generated content and mindfulness apps, data.ai said. (Ah, youth!) They also have a preference for Meta’s Instagram over Facebook, TikTok, Snapchat, Netflix and Spotify.

Another trend driven by younger users was the rise of BeReal, a more authentic photo-sharing app that prompts users once a day to take candid photos of themselves and what they’re doing. Data.ai found that no other social app added more new users in the U.S. over the past five years than the 5.3 million users BeReal gained in August 2022. But the firm suggested BeReal may struggle to grow engagement since the app only asks people to use it for brief periods. However, in speaking with those close to the company, we understand BeReal is purposefully trying to build a non-addictive social app — it just doesn’t know how to monetize that sort of creation.

Another app category driven by Gen Z trends is friend-finding, which includes apps like Yubo, Hoop, Bumble (for its BFF feature), Live Talk and others.

Image Credits: data.ai

Meanwhile, in terms of gaming, the Gen Z demographic showed a preference for party, simulation and shooters, and counted Roblox as their No. 1 app. If there’s any wonder why Meta is spending billions trying to develop a virtual gaming landscape with Horizon Worlds, just look at Roblox’s growth and traction among the younger demographic. “Creative Sandbox” games like Roblox as well as Minecraft saw a global increase in time spent last year, up 25% from 2021 to 2022.

Image Credits, above and below: data.ai

A few other interesting highlights:

  • The most-searched iOS App Store keywords in the U.S. for entertainment apps were, in order: netflix, disney+, hulu, HBO max, paramount, paramount+, amazon prime, peacock tv, prime video and tubi. Maybe Netflix will be okay after all.
  • Genshin Impact reached $3 billion in in-app purchases in Q2 2022.
  • Game publishers in China drove a third of consumer game spending.
  • Crypto apps’ downloads fell in 2022, even as other fintechs grew.
  • Average MAUs among the top five neobanks in the U.S. climbed from 1.4 million in 2020 to 2.2 million in 2022. Chime is the market leader in both active users and user engagement.

Image Credits: data.ai

  • Consumers spent nearly 110 billion hours in shopping apps in 2022, up 9% globally. Cost-conscious shoppers drove growth.
  • Total time spent in social apps climbed 17% year-over-year to over 2 trillion hours on Android phones in 2022. The U.S. accounted for more than one-fourth of social app consumer spending.
  • Sports betting app downloads hit 4.3 million at the start of the 2022-2023 NFL season, up 8% year-over-year from 2021.
  • Language learning apps saw 31% year-over-year growth as travel returned post-pandemic.
  • Consumer spend in dating apps grew 12% year-over-year in 2022, and 91% year-over-year compared to pre-pandemic spend.

Apple let scammy “ChatGPT” apps flood the App Store

What, no I mean, what is going on with App Review? For years, Apple has been caught off guard at times, allowing violative apps to slip through its review process to be published on the App Store until users or the media called out the mistake.

But in the case of the scam “ChatGPT” apps that flooded the App Store over the past couple of weeks, one has to wonder if Apple is even paying attention at all. ChatGPT’s maker OpenAI doesn’t offer a public API, so that should have been a red flag to reviewers about any app claiming a ChatGPT or OpenAI connection in its name or description, then charging money for access. One app, called “ChatGPT Chat GPT AI With GPT-3,” even managed to reach the Top Charts in the productivity category in multiple countries as a result of consumer demand for ChatGPT and Apple’s inattention. (The app was removed shortly after reporters, including ourselves, reached out to Apple for comment. Apple never answered our emails.)

Google Play had the same problem, but frankly, consumers expect more from Apple’s App Store. In fact, Apple’s argument against antitrust concerns, like its ban on sideloading and third-party app stores, has to do with the safety and security of its users. Apple says only it should be trusted to keep consumers safe. But surely that means Apple should also be protecting consumers from scam apps and subscription scams. But it is not.

And while no system is perfect, it seems like the apps that are at the top of the App Store’s charts — or those that quickly moved up the charts for unknown reasons — should go under an additional review by Apple, just to make sure they’re playing by the rules. Developers have long argued that Apple should be cracking down on apps with high-priced subscriptions or those that are charging users for basic utilities or otherwise free features — in other words, the apps that are profiting from scamming users. If it did so, a subscription-based app that appeared to be charging for access to a free service with a non-public API wouldn’t have made the cut.

These things aren’t hard to spot either — third-party app intelligence services can parse customer reviews for negative sentiments and keywords, so surely Apple could implement a system of its own, if it wanted to. In the case of the scammy ChatGPT apps, customer reviews called the apps fake and non-functional, warning others not to get scammed. Where was Apple on this issue? Until the media coverage, it was quietly collecting its cut of the scammers’ subscription revenues.

In other App Store news, activist investors have pressured Apple for more insight into app removals, the FT reported, but their interest lies in wanting a better understanding of when Apple acquiesces to foreign governments’ requests. The company will begin including additional information in its Transparency Report about whether removals are related to local laws and how many apps were pulled in each country.

Goodbye, Instagram Shop. Move over, Reels. 

Image Credits: Instagram

Instagram announced this week it will simplify its in-app navigation after years of confusing changes designed to push various products like Instagram Shop and Reels. The company said, starting in February, it will return the Compose button (the plus sign “+”) to the front and center of the navigation bar at the bottom of the app and it will remove the Shop tab entirely.

As a result, the Reels button will now move over to the right of Compose, losing its prime spot.

The earlier changes that had pushed Reels over Compose had been fairly controversial as Instagram users felt as if the company was forcing them to use the app’s new products at the expense of the overall user experience. Instagram defended the changes in prior years as a way to introduce users to its new products. But in more recent months, there’s been increased backlash over how far Instagram has deviated from its original mission. Even the Kardashians criticized the app for “trying to be TikTok.”

Instagram said shopping on Instagram will continue to be supported despite the removal of the tab. We’ll see.

Weekly News

Android Updates

  • Google is working to fix a Google Play issue impacting missing app changelogs, according to an Android Police report.
  • The latest stable release of the official IDE for building Android applications, Android Studio Electric Eel (2022.1.1), arrived. The release includes updates and new features that cover design, build & dependencies, emulators & devices, and IntelliJ, Google said.
  • Google released the Extension SDK to developers, bringing features like the Android 13 Photo Picker API and AdServices APIs to Android 11 and up.

Apple News

  • Second developer betas for iOS 16.3, iPadOS 16.3, watchOS 9.3, macOS Ventura 13.2 and tvOS 16.3 have arrived. One notable change impacts the new Emergency SOS feature. The “Call with Hold” option is renamed to “Call with Hold and Release,” as now the call to emergency services won’t go through until users let go of the buttons they press down to start the SOS call. More here. The change may be an attempt to address issues over mistakenly triggered calls.
  • Seems like Apple pushed Flickr to update its SafeSearch filtering. The company said it updated the feature so it won’t return results for “bad words” when it’s enabled in order “to act in compliance with Apple’s policies.”
  • Bloomberg’s Mark Gurman reported that iOS 17 is going to be a smaller release with fewer changes as Apple focuses on its mixed-reality headset.
  • Apple Maps now lets businesses update their listings and tout promotions via a new Apple Business Connect portal. No plans yet for any sort of Maps ads offering, however.
  • In a year-end review, Apple announced it has now paid out a record $320 billion to app developers since 2008 — a number that reflects the revenue apps have generated, minus Apple’s commission. The company now has more than 900 million paid subscriptions across Apple services, with subscriptions on the App Store driving a “significant” part of that figure, it said.

Image Credits: Apple

Gaming

  • Google and Nvidia shared concerns with the FTC as to how Microsoft’s Activision Blizzard deal would give it an unfair advantage in cloud, subscription and mobile gaming.
  • JioGames, part of Reliance Industries’ telecom platform Jio, announced a 10-year strategic partnership with France’s Gamestream. The latter will assist JioGames in bringing cloud gaming to “1.4 billion” Indians by helping scale the JioGamesCloud platform. JioGames’ titles can be played on Android, web (PC, Mac and iPhone), and Jio’s set-top boxes.
  • Roblox could be coming to a new platform: Meta Quest. Sources told The Verge that Roblox will be expanding its VR footprint — it already works on Rift and HTC’s Vive — by releasing to Meta’s Quest, which doesn’t require a PC to play.
  • Stardew Valley’s big update, patch 1.5, finally reached iOS and Android users. The update, which arrived on consoles in 2021, includes a number of new features and changes, including a new beach farm layout, new NPCs and enemies, ostriches (!!) and a new location called Ginger Island.

Stardew Valley screenshot

Image Credits: Stardew Valley

Twitter Drama

  • Twitter’s API began experiencing issues that are impacting third-party Twitter apps like Tweetbot, Echofon and Twitterrific. The app makers confirmed the problems have been causing log-in issues for users and their apps no longer work.
  • Online publishing platform Medium, originally created by Twitter co-founder Evan Williams, announced that it’s embracing the open source Mastodon platform by creating its own instance to support its authors and their publications. Access to the instance will be offered through a Medium membership, which means in a way, it’s the first paid instance to come to Mastodon.
  • Twitter’s Blue subscription, which is the new way to be verified and get your checkmark — degrading the value of checks in the process!rolled out to Japan. Users can subscribe for ¥980 (around $7.40) per month on the web and ¥1,380 ($10.42) per month on iOS, a bit lower than U.S. prices of $8 per month on the web and $11 per month on iOS.
  • Twitter made the algorithmic timeline the default and renamed it the “For You” feed. (Eye roll). You can now swipe between the For You feed and a chronological timeline, as well as lists.

Entertainment

  • TikTok is alpha testing a Talent Manager Portal with select talent agencies. The service would allow creators’ agents and reps to oversee, execute and analyze brand deals their clients are being offered.
  • Apple Music and the Apple TV apps quietly launched on the Microsoft Store — a few months after Microsoft said the apps would be coming to Windows 11.
  • YouTube will begin sharing ad revenue with Shorts creators on February 1, and will update its YPP terms to reflect this. (Take that, TikTok!)

Etc.

  • Failed discount movie tickets service MoviePass is trying for a comeback with funding from crypto backers, Animoca Brands.
  • Google added emoji reactions to Meet video calls, starting on iOS and web, with Android to follow. The feature was announced last year.
  • Not so super. Tata Group’s super app Tata Neu is expected to meet only half its sales target in its first year — $4 billion versus an $8 billion target. The app had been modeled on successful apps like Alipay and WeChat.
  • Tinder and other Match dating apps will introduce tips on how to avoid romance scams. Someone watched “The Tinder Swindler,” apparently!

Government & Policy

  • TikTok’s CEO, Shou Zi Chew, met with senior European Union lawmakers to answer a number of questions including privacy, data protection, DSA compliance, child safety, Russian disinformation and the transparency of paid political content. The inquiry follows what’s expected to be increased regulatory scrutiny of the app, including possible oversight by the European Commission.
  • After being fined $400 million by Ireland’s Data Protection Commission over how Instagram handled minors’ accounts and data, Meta announced it would remove the ability for advertisers to target teen users by gender. The company will also end personalized ad targeting to users under 18 based on in-app activity, like who they follow on Instagram and what Facebook pages they like.
  • New Jersey and Ohio have now joined 20 other U.S. states in banning TikTok on government-owned devices over security concerns.
  • The U.S. Supreme Court declined to block a lawsuit filed by WhatsApp that challenged the alleged mass phone hacking by Israeli spyware maker NSO Group. The spyware maker had argued the suit should be dropped because it was acting on behalf of a foreign government, but the Supreme Court rejected this claim.

Funding

  • A Twitter rival called ‘T2’ raised its first outside funding, with $1.1 million from a group of high-profile angels including Bradley Horowitz, Rich Miner and the former CEO of Wikipedia, Katherine Maher. T2 founder Gabor Cselle has sold startups to Twitter and Google previously.
  • Payments technology platform Butter Payments raised $21.5 million in Series A funding led by Norwest at a ~$100 million valuation. The company leverages AI to help end accidental churn.
  • Kakao Entertainment, which publishes apps for popular animated shows and novels, raised $930 million from Saudi Arabia’s PIF and Singapore’s GIC.
  • A company developing a cognitive behavioral therapy platform for ADHD, Inflow, raised $11 million in Series A funding. Inflow’s self-help app offers daily exercises and challenges focused on habit development, mindfulness techniques, community support and more.
  • Social crypto wallet app The Easy Company raised $14.2 million in seed funding. The iOS and Android app offers an Instagram-like experience for showcasing NFTs.

Image Credits: The Easy Company

Layoffs

  • Tokyo-based news aggregator SmartNews laid off 120 people in the U.S. and China, with plans to implement a voluntary workforce reduction in Japan.
  • Fintech for kids Greenlight, which lets kids use a debit card and app with parental monitoring, laid off 104 employees — or more than 21% of its total headcount of 485 employees.
  • Crime-reporting app Citizen laid off 33 employees, including at least 10 engineers. The app uses public police blotters to notify users about verified incidents in their area, but also allows users in select markets to upload their own reports and livestream.
  • Right-leaning Twitter alternative Parler’s parent company laid off 75% of staff and chief execs, leaving Parler with just 20 employees. Kanye, as many expected, didn’t actually buy it.

This Week in Apps: ChatGPT app scammers, Instagram revamp and a consumer spending slowdown by Sarah Perez originally published on TechCrunch

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

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Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250


Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.  

2-US_Job_Quits_Rate-1-2

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels. 




From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

IMG_5092

In this jobs report, the unemployment rate for education levels looks like this:

  • Less than a high school diploma: 6.1%
  • High school graduate and no college: 4.2%
  • Some college or associate degree: 3.1%
  • Bachelor’s degree or higher: 2.2%
IMG_5093_320f22

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January…

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Inside The Most Ridiculous Jobs Report In History: Record 1.2 Million Immigrant Jobs Added In One Month

Last month we though that the January jobs report was the "most ridiculous in recent history" but, boy, were we wrong because this morning the Biden department of goalseeked propaganda (aka BLS) published the February jobs report, and holy crap was that something else. Even Goebbels would blush. 

What happened? Let's take a closer look.

On the surface, it was (almost) another blockbuster jobs report, certainly one which nobody expected, or rather just one bank out of 76 expected. Starting at the top, the BLS reported that in February the US unexpectedly added 275K jobs, with just one research analyst (from Dai-Ichi Research) expecting a higher number.

Some context: after last month's record 4-sigma beat, today's print was "only" 3 sigma higher than estimates. Needless to say, two multiple sigma beats in a row used to only happen in the USSR... and now in the US, apparently.

Before we go any further, a quick note on what last month we said was "the most ridiculous jobs report in recent history": it appears the BLS read our comments and decided to stop beclowing itself. It did that by slashing last month's ridiculous print by over a third, and revising what was originally reported as a massive 353K beat to just 229K,  a 124K revision, which was the biggest one-month negative revision in two years!

Of course, that does not mean that this month's jobs print won't be revised lower: it will be, and not just that month but every other month until the November election because that's the only tool left in the Biden admin's box: pretend the economic and jobs are strong, then revise them sharply lower the next month, something we pointed out first last summer and which has not failed to disappoint once.

To be fair, not every aspect of the jobs report was stellar (after all, the BLS had to give it some vague credibility). Take the unemployment rate, after flatlining between 3.4% and 3.8% for two years - and thus denying expectations from Sahm's Rule that a recession may have already started - in February the unemployment rate unexpectedly jumped to 3.9%, the highest since February 2022 (with Black unemployment spiking by 0.3% to 5.6%, an indicator which the Biden admin will quickly slam as widespread economic racism or something).

And then there were average hourly earnings, which after surging 0.6% MoM in January (since revised to 0.5%) and spooking markets that wage growth is so hot, the Fed will have no choice but to delay cuts, in February the number tumbled to just 0.1%, the lowest in two years...

... for one simple reason: last month's average wage surge had nothing to do with actual wages, and everything to do with the BLS estimate of hours worked (which is the denominator in the average wage calculation) which last month tumbled to just 34.1 (we were led to believe) the lowest since the covid pandemic...

... but has since been revised higher while the February print rose even more, to 34.3, hence why the latest average wage data was once again a product not of wages going up, but of how long Americans worked in any weekly period, in this case higher from 34.1 to 34.3, an increase which has a major impact on the average calculation.

While the above data points were examples of some latent weakness in the latest report, perhaps meant to give it a sheen of veracity, it was everything else in the report that was a problem starting with the BLS's latest choice of seasonal adjustments (after last month's wholesale revision), which have gone from merely laughable to full clownshow, as the following comparison between the monthly change in BLS and ADP payrolls shows. The trend is clear: the Biden admin numbers are now clearly rising even as the impartial ADP (which directly logs employment numbers at the company level and is far more accurate), shows an accelerating slowdown.

But it's more than just the Biden admin hanging its "success" on seasonal adjustments: when one digs deeper inside the jobs report, all sorts of ugly things emerge... such as the growing unprecedented divergence between the Establishment (payrolls) survey and much more accurate Household (actual employment) survey. To wit, while in January the BLS claims 275K payrolls were added, the Household survey found that the number of actually employed workers dropped for the third straight month (and 4 in the past 5), this time by 184K (from 161.152K to 160.968K).

This means that while the Payrolls series hits new all time highs every month since December 2020 (when according to the BLS the US had its last month of payrolls losses), the level of Employment has not budged in the past year. Worse, as shown in the chart below, such a gaping divergence has opened between the two series in the past 4 years, that the number of Employed workers would need to soar by 9 million (!) to catch up to what Payrolls claims is the employment situation.

There's more: shifting from a quantitative to a qualitative assessment, reveals just how ugly the composition of "new jobs" has been. Consider this: the BLS reports that in February 2024, the US had 132.9 million full-time jobs and 27.9 million part-time jobs. Well, that's great... until you look back one year and find that in February 2023 the US had 133.2 million full-time jobs, or more than it does one year later! And yes, all the job growth since then has been in part-time jobs, which have increased by 921K since February 2023 (from 27.020 million to 27.941 million).

Here is a summary of the labor composition in the past year: all the new jobs have been part-time jobs!

But wait there's even more, because now that the primary season is over and we enter the heart of election season and political talking points will be thrown around left and right, especially in the context of the immigration crisis created intentionally by the Biden administration which is hoping to import millions of new Democratic voters (maybe the US can hold the presidential election in Honduras or Guatemala, after all it is their citizens that will be illegally casting the key votes in November), what we find is that in February, the number of native-born workers tumbled again, sliding by a massive 560K to just 129.807 million. Add to this the December data, and we get a near-record 2.4 million plunge in native-born workers in just the past 3 months (only the covid crash was worse)!

The offset? A record 1.2 million foreign-born (read immigrants, both legal and illegal but mostly illegal) workers added in February!

Said otherwise, not only has all job creation in the past 6 years has been exclusively for foreign-born workers...

Source: St Louis Fed FRED Native Born and Foreign Born

... but there has been zero job-creation for native born workers since June 2018!

This is a huge issue - especially at a time of an illegal alien flood at the southwest border...

... and is about to become a huge political scandal, because once the inevitable recession finally hits, there will be millions of furious unemployed Americans demanding a more accurate explanation for what happened - i.e., the illegal immigration floodgates that were opened by the Biden admin.

Which is also why Biden's handlers will do everything in their power to insure there is no official recession before November... and why after the election is over, all economic hell will finally break loose. Until then, however, expect the jobs numbers to get even more ridiculous.

Tyler Durden Fri, 03/08/2024 - 13:30

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