On the first Friday of each month, the Bureau of Labor Statistics (BLS) makes big news when it releases its preliminary estimate of the change in nonfarm payrolls for the previous month.
Revisions to estimates reported in earlier months are also reported, but typically get much less attention. There are normally two rounds of revisions to each month’s data, reported one and two months after the initial report as more complete data become available.
It seemed to me that there was a tendency for these revisions to be “upward”, that is, for the initially-released numbers to have been too low. So I tracked down the Employment Situation reports between February 2005 and January 2006 and collected the numbers.
The numbers are below. Initial reports are the top numbers, first revisions the middle, and second (final) revisions at bottom. Numbers in red were not given in the report two months after they were initially reported; my assumption is that they were revised only once, and I have carried them down for consistency of format.
And yes, between February and December (and counting December, even though only one revision has come out), upward revisions were the norm, occurring in ten of eleven months (October was the exception), with a mean change between the initial release and the final reported revision of just under 40,000 (including the downward revision in October).
In case you’re curious about how likely that is, I’ll save you some trouble; the “pure chance” probability of getting more than 9 revisions out of 11 in the same direction (assuming no actual tendency for them to be in a particular direction) is about 0.01. Bear in mind, however, that my choice of these months was not random – I had a sense that the revisions were disproportionately upward, which was why I pulled a year’s worth of numbers, and the months were also consecutive rather than truly randomly selected.
Still, the data suggest that the BLS establishment survey systematically undercounted jobs created in its initial reports over the last year. I have no idea why this would be the case. I doubt it is politically motivated, but it may, of course, have political ramifications.
Things that make you go "Hmmmm"
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