about that less than stellar jobs report….

No, not today’s (which, with 115,000 net new jobs in April was several steps sub-stellar). I am talking about last month’s.

The following is from the last paragraph of today’s release:

The change in total nonfarm payroll employment for February was revised from +240,000 to +259,000, and the change for March was revised from +120,000 to +154,000.”

Two lessons here. First, the February growth was actually pretty impressive, crossing the 250,00 mark. And the March report was upped more than 28 percent. Still not enough to make a serious dent in unemployment, but better than first reported.

Which leads to the second lesson. These reports are always updated (twice) and usually changed. In the following chart I show how BLS job numbers changed 2 months after their initial release over the past 24 months (data here). For example, January and February have both been revised to 32,000 more jobs than initially reported (the BLS numbers quoted above for February are an update of an update). Late last summer more than 100,000 jobs were added over initial estimates. Interestingly, this shows is that during this time frame job numbers were almost always revised up. In some respects this means that the economy was doing better at the time than we actually thought it was.

Why do they change so much over time? It reflects a tradeoff between timeliness and accuracy. The monthly Employment Situation report is based on a (large) survey of employers. While this allows policy makers to take the pulse of the economy, it remains a statistical estimate based on a sample of employers. Over time, the employment picture clarifies, as more detailed data from other sources becomes available.

So, while the monthly Employment Situation generates the headlines the day it’s released, it is important to take it with a grain of salt…clearly, things aren’t always as they seem

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