The Recession the Unemployment Rate Can't See | Eric Pachman on the Data Beneath the Jobs Report

**SPEAKER_1** (0:01)
This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up required compatibility and availability varies 18 plus.

**SPEAKER_2** (0:26)
The new LinkedIn Hiring Pro can't undo your last hire, the no show. Who set you back because they didn't show up on day one or day two or ever again? Now your product launch is delayed because you're talking to alien abduction podcasters to track them down.
But LinkedIn Hiring Pro can help make sure your next hire sticks. In fact, businesses who use LinkedIn are 24 percent less likely to reopen a role in the next 12 months. Hire right the first time with LinkedIn Hiring Pro. Post a free job today at linkedin.com/quality.

**Matt Zeigler** (0:58)
You're watching Excess Returns, the channel that makes complex investing ideas simple enough to actually use or better questions lead to better decisions. I'm Matt Zeigler and today's guest is the author and data nerd at Data 4 The People like it says on his shirt, Eric Pachman. Welcome back to Excess Returns.

**Eric Pachman** (1:16)
Thanks for having me. Great to be back.

**Matt Zeigler** (1:19)
You came on last call this past month. You did a segment on what the Fed is looking at when they're talking about employment and inflation. I promised we would do this episode to go deeper into each because the stuff you've been writing at Data 4 The People has been just on fire lately. So we're going to do the deep dive today.
You said though, right before we recorded, you wanted to say thank you. You got a bunch of traffic, a bunch of people checking out the site.

**Eric Pachman** (1:44)
Yeah, it was almost shocking. I was getting these anomaly reports from Google and everything. The search traffic, we're a sleepy little site, building all organically, all word of mouth, bare bones to zero funding at this point in time, just doing the work because we love it.
I was just on the tail end of your last podcast, like your weekly recap type thing. And all of a sudden, it's like 60 people signed up for my distribution list. And distribution list, that's a heavy lift, right? Like you have to actually go to the site, read the slate, click a button, put your email address in. I get it. Like that takes some commitment.

**Matt Zeigler** (2:30)
And you already have a listener base with gumption. We've got some gumption out there. And I'm telling you, I'm telling you, dear listener at home, make the man grateful and you want this data because this is where I'm starting us.
We talked about the Fed, the way the Fed's looking at the numbers. Eric thinks there are flaws and problems, not just with the numbers they're looking at at the top level, but then as we drill down into their component parts. So drawing on public data sets like BLS data and other places, he'll give us sources as we go through these. This is not the arrangement that they're looking at this data lens through. So if you're running money, if you're handling stuff with clients, you want to see data for the people and what he's doing. So I'm going to ask you very, very high level. Right now, I want to lead with employment. I want to lead with labor.
Yeah. The employment trend in the US right now is employment running up, down, sideways. What direction does it look like we're heading?

**Eric Pachman** (3:29)
Yeah. So I think that you phrased that question in exactly the right way, and we have a dashboard for that.
So if you go to Data 4 The People, we just released a brand new dashboard where we take the current population statistics data. So this is the household survey. So just a little bit, like little aside here.
We get the employment report every month, moves the market one way or another.
There are two surveys that are published here. Hopefully, most people know this. The CES, that is the institutional survey, that is where the non-farm paywall comes from, and the CPS, that is the household survey, that is where the unemployment rate comes from. So those are separate. They sometimes will tell completely different stories because they're totally different surveys. One is surveying people, the other one is surveying businesses. Both the response rates are falling off a cliff right now, so there's that, but that's a whole other discussion. So how much we trust them? I don't know. But they're the best data that we have. So when I was with Ban Creek, an asset manager, before I started Data 4 The People, we created a really good, it's called the tree map, and go to bancreek.com, you can look at it. And you can drill down into the non-farm payroll data. So if you see, I don't know what last month was, it was like 50,000 change or whatever. That's what is called at the BLS hierarchy level zero, highest level. And then when the number gets higher, you go down to more granular levels until you get to like sewing machine fabricators or whatever down at level seven. So you can see a lot of detail on all the industries. That's already there at Bancreek. That's the CES. That's the Survey of Businesses, right? Non-farm payroll data. So the problem with the CPS data, and again, sorry for all the detail, I think this is really important.