I find it tough to get excited about benchmark revisions but tomorrow's non-farm payrolls re-think is getting plenty of attention. Economists at Goldman Sachs think between 600,000 and 1 million jobs could be shed in the revision, raising new questions about the strength of the jobs market just ahead of Jackson Hole.
The Bureau of Labor Statistics conducts an annual revision of payroll figures that compares the data to a more comprehensive but less current source: the Quarterly Census of Employment and Wages. The QCEW derives its information from state unemployment insurance tax records, encompassing almost all jobs in the United States and a June report suggested job growth may have been less robust.
However these numbers are limited to the 12 months ending in March, so it's not exactly timeline. The current numbers show 2.9 million jobs added in that year or 242,000 per month.
The revisions have gotten plenty of attention but it's unclear how much markets have priced in or exactly what is expected. JPMorgan sees about 360K jobs lost, for instance.
Also notable, is that the QCEW may actually be a worse report than non-farm payrolls because it doesn't capture illegal immigrants (NFP does, or tries to). The revisions rely on jobless claims, which obviously aren't available to illegals.
So on net, I tend to think this will be a non-event for markets but given how quiet the newsflow is lately, I imagine it will get plenty of attention.
