Huge Downward Jobs Revisions Coming

[marmar]

from Mish's Global Economic Trend Analysis:






Huge Downward Jobs Revisions Coming


Once again today's job numbers show Collectively, Economists Are A Perpetually Optimistic Lot. Payrolls were expected to drop 175,000, the median of 84 estimates in a Bloomberg News survey of economists. Forecasts ranged from decreases of 260,000 to 100,000.

Jobs losses this month totaled 263,000, worse than even the most pessimistic economist projection.

Actually, economists missed by another 13,000 because revisions subtracted 13,000 from payroll figures previously reported for August and July.

Moreover, the unemployment rate hit the highest level since 1983.

Bloomberg discusses the above in U.S. Economy: September Job Losses Exceed Forecast.

What really caught my eye though is the expected backward revision coming February 2010.

The Labor Department today also published its preliminary estimate for the annual benchmark revisions to payrolls that will be issued in February. They showed the economy may have lost an additional 824,000 jobs in the 12 months ended March 2009. The data currently show a 4.8 million drop in employment during that time.

The projected decrease was three times larger than the historical average, the Labor Department said. Most of the drop occurred in the first quarter of this year, probably due to an increase in business closings, the government said.

http://globaleconomicanalysis.blogspot.com/2009/10/huge-downward-jobs-revisions-coming.html

[pinqy]

1. Not a real surprise

Because businesses are constantly being created and closing, it's impossible to keep track on a monthly basis. So BLS uses a birth/death model to estimate how many businesses come into being and how many fold...and the number of jobs gained/lost. But like any model, its estimates are based on prior data, so in unusual economic times it's subject to greater inaccuracies. So it's not really a surprise that the model was probably overestimating the number of new businesses and/or underestimating the number of business failings.

[Hestia]

2. Be that as it may, all the job losses have been due to Wall Street running the bottom line.

The only place to cut expenses is in labor - massive layoff, then treat the rest of the staff as economic chattel. Get companies back to reporting profit/loss at the end of the year or even bi-annum, rather than quarter-by-quarter. Then we'll see real progress, which includes wages. The combing over of each and every dime in order to pump "growth" has got to be kicked to the curb.