Seasonal Adjustments

Mike, look at the unadjusted.

Private -399k adjusted to +263k
Govt +984k adjusted to +73k

How does this make any sense? Aren't "seasonal adjustments" seasonal?

— Don Moulton CFP® (@MoultonWealth) October 6, 2023

“Govt +984k adjusted to +73k How does this make any sense? Aren’t “seasonal adjustments” seasonal?“

Government Jobs Are Highly Seasonal

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Government employment numbers from the BLS, chart by Mish

Many people mock seasonal adjustments but without them, employment would have risen by well over a million in September vs the reported 336,000 without those adjustments (excluding the private adjustment).

Private went the other way. The net of private and government seasonal adjustments was +582,000 turned into 336,000.

Looking at unadjusted numbers month-over-month is simply wrong.

A focus on unadjusted numbers makes sense only compared to the same month in prior years.

Change in Government Employment From Year Ago

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Government employment numbers from the BLS, chart by Mish

From a year ago, the wild swings are gone. Economists use seasonal adjustments for reasons that should now be clear.

That does not mean the underlying data is any good, but there is nothing inherently wrong with adjusting numbers. In fact, they need to be.

Jobs Unexpectedly Surge by 336,000 But Employment Only Rises by 86,000

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I do a detailed look every month at the jobs report.

For September of 2023, please see Jobs Unexpectedly Surge by 336,000 But Employment Only Rises by 86,000

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