I posted last night about the recent large revisions to the headline US jobs loss number. Today the BLS released its annual benchmark revision (which are separate from the monthly revisions that take place for the two months following the initial estimate). No surprise, the difference between the preliminary and final revision is huge. And very negative.

“The level of payrolls now reported for December is a stunning 1363K below what had been reported last month,” wrote Joshua Shapiro, Chief US Economist at MFR. “The main reason that payrolls were overstated by so much was in all likelihood the ‘birth/death adjustment,’ which is the methodology used to capture the effect of new small business formation. In the current economic and financial environment, this statistical adjustment is overstating the vibrancy of new business formation, particularly with small businesses finding bank credit very difficult to come by.” Read more