Image Source: Pexels

I have some new charts today on job revisions. Let’s discuss.

Data from the BLS via the Philadelphia Fed

BLS Survey Background

• Every month, the BLS monthly payroll reports produce a preliminary estimate of nonfarm payrolls.
• The BLS does two monthly revisions of nonfarm payroll as well as annual revisions.
• The monthly report is also called Current Employment Statistics (CES). Nonfarm payrolls are Establishment Survey (a survey of business employment).
• The unemployment rate comes from the Household Survey, a survey of individuals.

BLS Nonfarm Revision Chart Notes

• The above chart reflects the initial nonfarm payroll report and the two following monthly revisions.
• The chart runs through June because the July data has not yet been revised. June reflects the difference between the first report and the first revision in July.
• The other months reflect the difference between the initial report and the second revisions.

For fourteen of the last 20 months the revisions have been negative.

BLS Nonfarm Payrolls as Released and Revised

There is no revision yet to July so data runs through June.

The June second revision will come out this next monthly report this Friday as will the first revision to July.

Employment Revisions Six Month and 12-Month Rolling Sum

Negative revisions are not always associated with recessions, nor positive revisions with non-recessions.

Dating to November 1964 (that’s how far back the Philadelphia Fed data goes), there were 306 months of negative initial to third (or current for most recent months).

That’s 306 out of 717 months of negative revisions, 42.7 percent of the time. Positive revisions happen 57.3 percent of the time. But ….

BLS Revises Jobs Down by 818,000, About 68,000 Per Month

On August 21, I reported BLS Revises Jobs Down by 818,000, About 68,000 Per Month

Do I get to say I told you so? My advance estimate a month ago was 779,000 lower. Bloomberg estimated 730,000.

A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions

Here’s a A Breakdown, by Sector, of the Negative 818,000 BLS Job Revisions

Yesterday morning, I had difficulty finding the BLS job revisions. So did everyone else. Eventually the BLS posted -818,000 but my unadjusted calc of -915,000 is accurate too.

Q: How do those numbers factor into the monthly revisions?
A: They don’t.

CES Preliminary Benchmark Announcement

Please consider the CES Preliminary Benchmark Announcement

In accordance with usual practice [but not in the usual way], the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued in February 2025 with the publication of the January 2025 Employment Situation news release.

Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. For National CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus one-tenth of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates an adjustment to March 2024 total nonfarm employment of -818,000 (-0.5 percent).

Preliminary benchmark revisions are calculated only for the month of March 2024 for the major industry sectors. The existing employment series are not updated with the release of the preliminary benchmark estimate. The data for all CES series will be updated when the final benchmark revision is issued.

Big Bang Revision

Long after everyone cares about what happened in the first quarter of 2024, the BLS will post an annual revision in one big bang.

Every year, this makes all of the monthly data reports historical nonsense “in accordance with usual practice.“

Thought of the Day

68k downward revision per month on average. This means that productivity will be revised up while unit labor costs will be revised down.

Personal income and Gross Domestic Income will be revised downward and the personal saving rate will be reduced from its already very depressed level of 3.5 percent.

We should remember that the markets traded on this faulty data. The downward revision is confirmation that the birth/death model, which imputes the gain in jobs for small firms, is not working.

Happy Labor Day

More By This Author: