78 economists’ forecasts make up the “consensus” forecast for job growth each month, and the January consensus forecast was +125,000.
A few days ago, ADP’s payroll print surprised the consensus with a net loss of 301,000 jobs, influenced by supply chain disruptions, Omicron business interruption, and termination of unvaccinated employees not factored into the forecasts.
But then [Friday], the government (Bureau of Labor Statistics) reported a huge gain of 476,000 jobs in January – a 3 sigma deviation from consensus and twice the number of the highest forecast. The financial press describes the reaction of analysts as “gobsmacked”. It takes quite a bit to smack the gobs of professional market manipulators; kudos, BLS.
But wait…there’s more; they also retroactively added 709,000 jobs to November and December prints. Where did those jobs come from? By re-allocating previously claimed gains from the “it’s working” months of April, May and June. “It” gets to work twice, apparently. Who knew?
When pressed by the gobsmacked financial publication reporters, BLS explained that the miracle 467k January bump resulted from “adjustments” to seasonal and annual benchmark parameters in their models; the unadjusted count was a LOSS of 2.8 million jobs in January, or so they say.
Wait, what? Are the Packers’ special teams filling in at Dept. of Labor for its vax-terminated and Omicron-sheltered stat jockeys? And where do I find the seasonal adjustment knobs on my bathroom scale, sleep number bed, and fit-bit?
In meteorological terms, January payroll counts show a temperature of 30 below but BLS came up with a balmy 48 wind chill index. Do you put on the parka, chook, and swampers or just throw on a hoodie to take the dog out for a squirt? Your dog will figure out who got it right in a minute, but dogs don’t tweet.
BLS tweaking their model parameters is not new or particularly newsworthy; it happens every year. This administration has made two that are historically unprecedented, removing jobs for January of 2021 and creating jobs for January 2022. The year over year results will be fodder for the mememeisters in memistan – my newsfeed is filling up already.