August Job Loss - Not!

Last month, we were spooked by a report from the Bureau of Labor Statistics that "nonfarm payroll employment" had declined by 4,000 in August. At the time, I noted that "the payroll employment figure is preliminary and subject to revision" (handiness with caveats is an important professor skill).

Revise they have - now the BLS reports that August saw a gain of 89,000 jobs (and September, preliminarily, 110,000). The unemployment rate edged up slightly in September - from 4.6% to 4.7% - but this partly reflects entry into the labor force; labor force participation increased from 65.8% to 66.0%.

The revision is a useful reminder that we - and, more crucially, policymakers - never know the true current state of the economy - the (imperfect) statistics we have are retrospective. This is part of what is sometimes called the "recognition lag" in economic policy.

On his blog, Paul Krugman looked at "The Revision Thing" (and found the appropriate Keynes bon mot - there's one for every occasion!).