Jack Dunn - Reclaiming Common Sense

The January Jobs report is one of the months for which seasonally adjusted data was created. We have seen non-seasonally adjusted job losses during January "forever."  Non-seasonally adjusted (NSA) jobs, current population survey (CPS) data,  drop during January.Non-seasonally adjusted workers, Current Employment Statistics (CES) workers drop during January. The Seasonally adjusted CES data is used for the "Headline number." Non-farm payroll includes government workers. Total Private Sector (TPS) Jobs do not include the Government Sector Jobs. The TPS data is what was used for President Obama's "Job Streak." The Jobs streak is one of the Economic Urban Legends from the Obama Administration. What to watch in this report:

  • Changes to prior data. If the December SA CES data is revised up by 25,000 then that steals 25,000 from the January data.
  • The seasonal factor used to project the potential SA CES data was 1.01713. The seasonal factor is multiplied by the NSA CES value. A lower SF means a lower SA  CES.
  • The growth rate matters. If the growth rate is better than a contraction of 2.0% (-2.0 of better, better being closer to -1.8%) then we should have reported an addition of over 200,000 jobs

The Non-Seasonally Adjusted CES data recorded massive revisions to the data. The data for November was revised up from 125.716 million to 125.970  million. The December data was revised up from 125.654 to 125.885 million . January's data dropped to 123.292. Without the data revisions to December the contraction would have only been 1.86%. We would have seen 452,000 private sector workers added without revising the data higher. The story does not end there. It appears that all of the non-seasonally adjusted data for the private sector number have been revised back to 1981. Th most significant changes were during 2016 and 2017

The Seasonally Adjusted Data was revised higher, too. The seasonally adjusted data was revised for November and December, too. November was revised up from 124.893 million to 125.120 million. December was revised higher from 125.039 to 125.286 million. It is not surprising that the data back to 1981 was also revised.

There was a surprise jump in the seasonally adjusted Current Employment Statistics data from where it was reported just a month ago. The Non-seasonally adjusted CES and the Seasonally Adjusted CES data was revised all the way back to at least 1981. The data for 2016 saw the most revisions. They were better years than originally reported. Did we add 196,000 seasonally adjusted private sector jobs or over 400,000? Was this a Ho-Hum report or the best jobs report during the past 30 years? Was this Armageddon or was this winning?

It's the economy.