OK, let’s have a quick look at Friday’s NFP:
Yes, we know that 51k new jobs stink; No, it was not a "perfect number" (Attention Mark Zandi: please lay off the Psilocybin before airtime).
Notable beneath the awful headline was the even more astounding adjustment: Payrolls for the
12 months ended in March 2006 will be revised higher by 810,000
Thanks to this adjustment, the BLS now claims that job growth during the 12 months ended in March 2006 was 45 percent higher than previously reported. The revision magically adds payroll employment growth between March 2005 and March 2006 up by a 67,500 per month.
This was the
biggest revision since the Labor Department started benchmarking in 1991. To make a comparison, "the aggregate benchmark revisions dating back to 1996 added a whopping 1,555K jobs to the economy, 810K of which (52%) were added during April 2005-March 2006!"
Reuters noted that: "The historical average for the benchmark revision over the prior 10 years has been plus or minus two-tenths of one percent…BLS currently is researching possible sources for this larger-than normal expected revision."
This benchmarking is 100% larger than the largest prior numerical revision, and 50% larger than the prior percentage revision:
The ironic thing is that even after this revision, this still remains the worst job creation cycle in the post WWII era . . .
I need to do some more research into how credible (or INcredible) this revision is. But at first blush, it is an absurdly large outlier relative to prior benchmarking in BLS revisions . . .
Jobs Report Shows a Mixed Picture
Growth in Payrolls Slows,But Some Wages Increase;
Rate Shift Appears Unlikely
October 7, 2006; Page A3
U.S. jobs picture stronger with expected revisions
Reuters, Fri Oct 6, 2006 10:16am ET
CES Preliminary Benchmark Announcement
BLS, October 6, 2006