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Contrary to expectations, nonfarm payroll employment surprises +256K vs. +164K Bloomberg consensus. The standard deviation of changes is 85K, with mean +186 (over 2024), which means the surprise is about one standard deviation.

Several observers have questioned the accuracy of the CES measure of nonfarm payroll employment. On the basis of the preliminary benchmark, Heritage’s EJ Antoni argued the recession started in July. However, it’s apparent to me that there is some debate over the level of series.

Figure 1: Nonfarm payroll employment from CES (blue), implied from preliminary benchmark (red), implied from Philadelphia Fed early benchmark (green), CPS adjusted to nonfarm payroll concept (blue), CPS adjusted to nonfarm payroll concept, adjusted to incorporate CBO estimates of immigration (pink), QCEW total covered employment seasonally adjusted by author using X-13 (chartreuse), all in 000’s. Source: BLS via FRED, BLS, Philadelphia Fed, and author’s calculations.

Here’s the implication of the employment release (and implied preliminary benchmark) for business cycle indicators.

Figure 2: Nonfarm Payroll (NFP) employment from CES (blue), implied NFP from preliminary benchmark (bold blue), civilian employment (orange), industrial production (red), personal income excluding current transfers in Ch.2017$ (bold light green), manufacturing and trade sales in Ch.2017$ (black), consumption in Ch.2017$ (light blue), and monthly GDP in Ch.2017$ (pink), GDP (blue bars), all log normalized to 2021M11=0. Source: BLS via FRED, Federal Reserve, BEA 2024Q3 3rd release, S&P Global Market Insights (nee Macroeconomic Advisers, IHS Markit) (12/2/2024 release), and author’s calculations.

At least from the employment release, economic activity looks pretty robust at the end of the Biden administration.

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