The mainstream media cheered the news that the U.S. economy added 517,000 jobs last month. Sadly, that just isn’t true. According to reports and the St. Louis Federal Reserve, the US economy actually lost 2.5 million jobs in January.
Via Rich Dvorak: “The Not Seasonally Adjusted print for monthly change in Nonfarm Payrolls was -2.5 million jobs. That means the headline +517K employment gain reported in January was driven entirely by a +3 million seasonal adjustment.”
For those who mocked “community adjusted EBITDA,” I give you, the January nonfarm payroll report:
– loss of -2.5 million jobs… 📉😔
+ abracadabra🪄”seasonal adjustment” of +3 million
= Presto! ✨+517k jobs ✨ (adjusted) 🥳 https://t.co/W4nLnm6ij0
— Angus Davis (@angusdav) February 3, 2023
This is what actually happened.
What actually happened
– 2.5 million people lost their jobs in the post-
– BLS said 3 million would have been a normal seasonal adjustment.
— Bob Hyneman (@BobhynemanUSA) February 4, 2023
Zero Hedge reported:
And with the unemployment rate plunging to 3.4% – matching the lowest in 54 years – from 3.6%, while the payrolls report showing the addition of 517K jobs the highest since July, and far above the highest forecast – in fact, a record 9-sigma beat to median consensus, the shock was merited as today’s report was indeed a blowout.
But why: what happened that everyone was so wrong?
A couple of things. First, as we warned yesterday, today the BLS unveiled a slew of data revisions, which include updating the population controls – which would have the mechanical effect of boosting the labor force – and updating seasonal factors, which further distorted the January nonfarm payroll number (this is key as readers will read shortly). This is indeed what happened:
“And that, dear readers, is how you convert a 2.5 million plunge in jobs into a 517K, market blow-out 9-sigma payrolls beat, which moments ago allowed Biden to brag on TV just how strong his economy truly is…”https://t.co/7UkcsbvOdr
— StockTips (@StockTipsTips) February 4, 2023