Today’s payrolls report was a veritable shock: coming in at 467K, it was almost 4x the consensus median expectation of 125K, and was orders of magnitude above Goldman’s forecast of -250K. Putting the stunning, 3-sigma beat in context, it came above all 78 estimates, and was more than double the highest forecast of 225K from HSBC. Even more ludicrous were historical adjustments which saw December increased from 199K to 510K, November from 249K to 647K and so on.
The unbelievable figure emboldened President Joe Biden to assert, ‘2021 was the greatest year of job creation under any president in history.’
And if you buy that, I’ve got a bridge in the Everglades to sell you, too.
How is that possible?
After all even CNBC – while interviewing labor secretary Marty Walsh – couldn’t believe the BLS data, prompting the secretary to repeat on many occasions that the numbers are “credible” and he “stands behind them” and of course he will: after all, taken at face value the numbers signal a resilient labor market and demand for workers despite omicron’s hit. The gains were broad-based, spanning retail, hospitality, transportation and warehousing, business services and others. In short, contrary to data from even the Atlanta Fed whose GDPNow shows Q1 GDP rising just 0.1%, the labor data indicates an economy firing on all cylinders and growing strong.
But is that true? As the great prophet George Costanza once said: “It’s not a lie, if you believe it.” So it goes with government numbers. Following are the readjusted jobs numbers:
If true, the Fed should be empowered to proceed with its tapering and interest rate adjustment schedule. Watch out below.