On employment benchmark revisions and a falling unemployment rate coincident with fewer jobs created

Did you react to the positive jobs trend initially announced in September - October 2009? Oops, it was really a greater loss than expected, and not a gain at all. One can only suspect that in a few years this whole recovery could be revised away without so much as a bureaucratic blush.

The change is pervasive. One item of note is the taking of more job losses in the earlier years, setting up a stable base for potential job gains in the present, without embarrassing oneself by getting out of synchronization with the actual growth of the civilian population. There will be more 'truing up' of the numbers in the future.

Regarding that 'surprise drop' in unemployment to 9.7%, this is the result of people falling off the unemployment benefits radar, and becoming discouraged. It is essentially meaningless, if not downright misleading.

Jesse's Café Américain

A lot of people are questioning the unemployment rate of 9.7% in the face of a –20,000 non-farm payroll print.  How could we be losing jobs and have the unemployment rate drop?

...Bottom line: the unemployment rate downtick...is a statistical aberration due entirely to seasonal adjustments in the household survey in the number of people employed and unemployed.

Edward Harrison
Credit Writedowns