Yet again, the economic soothsayers couldn’t have been more wrong about the latest report on the state of the US labor market released Friday, adding to a mounting string of errant forecasts and raising an obvious question: Why do the people who make a living forecasting one of the most important data points in the whole economy get it so wrong so often?

The Bureau of Labor Statistics said nonfarm payrolls expanded by 165,000 in October, more than twice the median estimate of 70,000 in a Bloomberg survey of more than 70 economists. None of the forecasts came close, with the highest estimate being 131,000. Should we be concerned about the consistently wide divergence between what economists anticipate and the actual results, both on the upside and the downside? Yes, for the simple reason that it adds to unnecessary volatility in financial markets. But it’s not the result of some government conspiracy to manipulate the data or forecaster incompetence.

Let’s start with the recent misses. The 95,000 gap between what economists were expecting for October and the actual numbers wasn’t even the biggest of the year. Estimates for February, March, July and August were off by more than 100,000 each of those months! The average size of the miss (ignoring whether it missed low or high) has been around 88,000 in 2026, up from about 50,000 in 2010-2019, the period that I’m using as a proxy for “normal.”This is, to a significant degree, the predictable result of the decision to forego investment in America’s statistics agencies, long considered the world’s gold standard but lately forced to do the best that they can with shrinking resources.

In inflation-adjusted terms, BLS funding has fallen well over 20% since 2010, and the second Trump administration would have instituted deeper cuts still if lawmakers hadn’t pushed back. It’s no surprise then that sample sizes are shrinking and the BLS is struggling to counter the problem of getting enough people to respond to its surveys.

That brings me to a second point — which I’m adapting from the wisdom of my Bloomberg Opinion colleague Kathryn Anne Edwards — that it’s hard to predict labor market growth that’s this statistically close to zero. The Trump administration’s restrictions on legal immigration and its fear campaign against the undocumented population have stanched the flow of labor into the US economy, and this is one side effect. We’re dealing in job gains that by historical standards are so small that they’re often hard for economists and statisticians to differentiate from normal month-to-month noise.

One final bit of nuance: The BLS estimates payrolls by surveying a representative sample of establishments, but one challenge is that new employers are always being created or going out of business. The government fills the gap with what it is known as the birth-death model that has changed over time. The old model basically extrapolated stale data into the current period on a fairly smooth basis. That’s great if you’re an economist trying to guess the next report but not-so-great if you’re trying to understand what is really happening in the economy.

As of January 2026, the BLS instituted a new model that combines the extrapolation with more contemporaneous information, making it inherently more volatile. Does it work better? That remains to be seen at this early juncture, but it’s definitely harder to forecast.

The thing to hold onto is that this data is going to remain volatile and unpredictable, and labor market-watchers would be well served by focusing on longer-term trends instead of getting too worked up about individual reports. Friday’s strong number was certainly nice, but it’s hard to tell if there’s much signal in it. Meanwhile, policymakers must finally work to expand funding to the BLS and return to the task of creating sensible immigration policy that gives the economy the workers we need. Maybe then we can start producing some payroll gains that are statistically distinguishable from zero.