23 thoughts on “Gonna Have to be a Big Revision to Change the Picture

  1. pgl


    Total nonfarm payroll employment changed little in February (+20,000), and the unemployment rate declined to 3.8 percent

    How is that possible? Well the household survey showed two odd things: (1) it claims employment rose by 255 thousand; and (2) it claims those in the labor force declined by 45 thousand.

    ( I posted this under the previous thread but it belongs here. Moses had an interesting reply to my original posting of this comment).

  2. Bruce Hall

    Not sure the importance of this chart. Pretty common for adjustments to be in the ±50K-100K range with a fairly wide dispersion from the average. Seems that only tells us that the initial estimates are pretty rough.

    Today, the BLS reported:
    Establishment Survey Data

    Total nonfarm payroll employment was little changed in February (+20,000), after
    increasing by 311,000 in January. In 2018, job growth averaged 223,000 per month.
    In February, employment continued to trend up in professional and business services,
    health care, and wholesale trade, while construction employment declined. (See table


    Are we expecting further downward estimates for January and February? Or maybe February was understated?

    1. Willie

      I thought December and January were being revised up a bit. February was probably a lousy month for hiring, for reasons that aren’t likely to be repeated for the rest of the year. It’s just more evidence of chop toward the end of the recovery. We have a way to go before there’s a downturn. We are just done with strong growth for a while in my strictly outhouse economist’s view.

  3. 2slugbaits

    So just doing an eyeball thing here, it looks like there’s been about twice as many downward revisions (as measured by counts) in the last half of the time series than in the first half.

    1. Frank

      Hello 2slugbaits,

      Thank you very much for helping me on the GDP table a few months ago.

      I’m still working my way through AP micro and macro econ on edX. I’ll be happy to get an advanced high school understanding of economics.

      It looks to me like Deutsche Bank Global Research is plotting the table at BLS.GOV


      It looks to me like they are plotting the third column “3rd – 1st” (eighth column from the beginning of the table) in the table “Revision* in over-the-month change”.

      I plotted the period of record 1979-2018 in that table.

      The footnote at the bottom of the tables mention 2003.


  4. Steven Kopits

    “China’s economy is about 12 per cent smaller than official figures indicate, and its real growth has been overstated by about 2 percentage points annually in recent years, according to research. The findings in the paper published on Thursday by the Brookings Institution, a Washington think-tank, reinforced longstanding scepticism about Chinese official statistics. They also add to concerns that China’s slowdown is more severe than the government has acknowledged. Even based on official data, China’s economy grew at its slowest pace since 1990 last year at 6.6 per cent.”

    That is from Gabriel Wildau of the FT

    1. pgl

      China? WTF does China have to do with this post? I guess they are selling weed in Princeton these days. Lay off the stuff.

  5. Moses Herzog

    I’m guessing this has already caught the more cerebral observers out there such as our good host Professor Chinn, but I had only caught this in the later stages of Friday afternoon going through my regular internet run-through. Hat tip to Anthony Cheung of “Amplify” for bringing this to my attention. Germany Factory Orders, going from +0.9 to a negative 2.9% MoM. That is pretty drastic and I wouldn’t be surprised at all if that had something to do with the ECB providing more loans for liquidity to the European Banks. I guess Menzie would know how to put the German Factory Orders in log form or something?? This is also part of why Brexit deadline will inevitably be moved to June.

    1. Moses Herzog

      Forgot to mention, watching the taped upload of the 1:00pm pipe organ from Wall Street Church. LOVING it. Pipe organ is definitely more my speed than Opera music. Could say more sick perverse things about enjoying watching the organist playing related to my proclivity for…….. well, yeah.

    2. Ulenspiegel

      “Germany Factory Orders, going from +0.9 to a negative 2.9% MoM.”

      More pricise: The December data were revised from -0.9% to +1.5%. Aas a result of this revision, the January data were not longer slightly positive but became negaitve.

      1. Moses Herzog

        I’m not doubting your word, but just for my own edification, can you tell me where you got the revised December numbers?? A link or something would be appreciated. So I know where to look next time if there are more up-to-date numbers.

        1. Ulenspiegel

          The FAZ reported the new numbers a few days ago. Therefore, Destatis should have them somewhere. 🙂


          “Die deutsche Industrie hat überraschend zu Jahresbeginn einen Auftragseinbruch erlitten. Das Neugeschäft ging im Januar um 2,6 Prozent zum Vormonat zurück, teilte das Statistische Bundesamt am Freitag mit. Ökonomen hatten mit einem Zuwachs von 0,5 Prozent gerechnet.

          Im Dezember waren die Aufträge nach revidierten Zahlen um 0,9 Prozent gestiegen. Dies wurde mit „nachgemeldeten Großaufträgen“ begründet. Zunächst wurde von einem Minus von 1,6 Prozent ausgegangen. Laut Bundeswirtschaftsministerium zeichnet sich mit dem aktuellen Orderrückgang „eine weiter anhaltende konjunkturelle Abkühlung in der Industrie“ ab.”

          1. Moses Herzog

            Hmmmm, well as someone with a decent amount of German ancestry I’m ashamed to say I understand very little German. But there’s always Google translate, and I do appreciate the link and two names you gave. I will check them out right now. Again, appreciate the link and response.

            Warm regards and thank you again
            Uncle Moses (you know, the uncle you try to avoid at Thanksgiving)

          2. Moses Herzog

            @ Ulenspiegel
            It seems like you got your pluses and your negative signs mixed up. When I use Google translate this is what it gives me, and it seems like a pretty good translation, better the the usual herky-jerky Google Translate kicks out. Since the translation is of a “Taz dot net” article I will put it in bold print and quotations:
            “The German industry surprisingly suffered a slump in orders at the beginning of the year. New business fell in January by 2.6 percent to the previous month, said the Federal Statistical Office on Friday. Economists had expected an increase of 0.5 percent.

            In December, orders rose by 0.9 percent according to revised figures. This was justified by “registered large orders”. Initially, a minus of 1.6 percent was assumed. According to the Federal Ministry of Economics, the current decline in orders is “a continuing economic slowdown in the industry”.

            Domestic orders fell 1.2 percent month-on-month in January, while foreign orders fell 3.6 percent. Incoming orders from the eurozone declined by 2.6 percent. Incoming orders from the rest of the world decreased by 4.2 percent compared to December.

            Mechanical engineers are thrown back

            Germany’s machine builders are clearly feeling the economic slowdown now. Orders in January fell by 9 percent on a price-adjusted basis in January, according to the industry association VDMA on Friday in Frankfurt. There was a significant drop of 11 percent in foreign orders. Orders from domestic customers fell by 5 percent.”

            I don’t know why I bothered to sniff this out, as you have LIED many times on this blog before. I wasted about 10 minutes of my G*ddamn life sniffing out your bullshit to find out you can’t do positive and negative math signs. Tell the propaganda bureaus in Russia and China I said “hello” and Go F yourself.

  6. AS

    What I want to know is how someone could have forecasted a change of +20,000 jobs. Someone did as shown on the FRED Forecasting Game results, https://research.stlouisfed.org/useraccount/fredcast/.
    It actually appears that several contestants forecasted close to +20,000. This humble participant forecasted +160,000. The Econoday consensus was +178,000 and the consensus range was +130,000 to +200,000. https://us.econoday.com/byshoweventfull.asp?fid=498794&cust=us&year=2019&lid=0&prev=/byweek.asp#top

    Any experts willing to share some knowledge on this?

    1. Moses Herzog

      @ “AS”
      Can I comment even if I don’t consider myself an “expert” on this topic??

      My guess is there are very large humber of participants in these contests. Let’s say there were 100,000 contestants/participants. Not too crazy of a number if you consider FRED is a well respected site and is used across the entire nation–if not even a few international students and teachers might access it. If only 5% of them guessed 20,000jobs then that would be 5,000 participants who had “nailed it on the head”. Only 5% of the participants. So as you can see, it’s not that much of a stretch to imagine many people could have guessed that number. It wasn’t completely out of the question the number was even going to be negative.

      The “smart money” (not my term for them) Dealer/bankers had it at about 183k jobs if it makes you feel any better. You can see most of the banker/dealer guesses in this twitter link. and that’s exactly what they were—guesses—educated guesses, but guesses:

      1. AS

        I had considered what you said, but wanted to know if there was some other explanation other than guesses.
        Thanks for the thoughts.

    2. JBH

      AS: More luck than anything. The greater the number of forecasters the more likely one or two will hit the actual number. Likely the more accurate half of forecasters had a pessimistic view of the economy and therefore lowball forecasts. This economy is weakening. Prior month was a big up, hence reversion to the mean or even below was near definite. The drop in construction was probably due to snow. Smart forecasters take weather into account in the depth of winter. Also, employment in both the mnf and services ISMs fell in Feb. A composite of the regional Fed employment numbers might also have been helpful. It is by pieces like this that one could have cobbled together a 20,000 forecast. But as this was the largest error for the ADP survey since 2013, something out of the ordinary went on. Are the forecasters who got the number right also more accurate on a consistent basis? I have no idea, but my guess is probably not. Bringing this full circle, the answer to your question is more luck than anything.

    3. JBH

      AS: Here’s another way to slice it. Deviation from the average monthly was 190. This is what’s to be explained. 50 due to construction, 20 to transportation and warehousing, 38 to education and health, and 54 to leisure and hospitality (over half eating and drinking out). These four explain 85% of the total. Anytime you can get 80% or more of anything right you know something. Reflecting on this pattern, weather and stress on the consumer have to be important underliers. A close look at the components reveals nearly uniform across the board decline, with a few large components either holding in place or not improving. This points to an exhausted consumer stretched out on debt. I have no ready explanation for the education-health sector.

  7. Moses Herzog

    Some other stories I wanted to highlight. Two from an old hardcopy WSJ laying around that I finally read. I don’t know if you guys can get passed the paywall, but if you can I think it’s worth it. And this relates to some underlying market risk right now that I’m not sure was covered in Professor Hamilton’s relatively upbeat recent post on recession possibility:

    Now here’s another one that I found interesting. They say they don’t put the real names on the homes because of “privacy”. Now who here is DUMB enough to believe that?? Please raise your hand and then go stand in the corner for 6 hours to clean your shame off.
    They buy these with no name on the ownership title for the same reason Russian mobsters/criminals by Condo space in trump Tower—to either hide or launder their dirty money. Imagine trying that one out if you were a poor person buying a mobile home lot?? I’m sure everyone would be “agreeable” to that stunt. It boils down to realtors and bankers putting a stamp of approval on white collar crime or a stamp of approval on parking high net worth criminals’ assets. And that is the ONLY reason they do it, not “privacy”.

    And here’s another beautiful story, brought to you by donald trump’s BFF and Bride of Satan Betsy Devos. The article is by Stacy Cowley and Erica L Green of NYT. I’m going to try to highlight the better parts (if you can label any part of human suffering a “better part”) in bold text:

    “Barely a year after the takeover, dozens of Dream Center campuses are nearly out of money and may close as soon as Friday. More than a dozen others have been sold in the hope they can survive.

    The affected schools — Argosy University, South University and the Art Institutes — have about 26,000 students in programs spanning associate degrees in dental hygiene and doctoral programs in law and psychology. Fourteen campuses, mostly Art Institute locations, have a new owner after a hastily arranged transfer involving private equity executives. More than 40 others are under the control of a court-appointed receiver who has accused school officials of trying to keep the doors open by taking millions of dollars earmarked for students.
    “The problems, arising amid the Trump administration’s broad efforts to deregulate the for-profit college industry, began almost immediately after Dream Center acquired the schools in 2017. ”
    The fall accelerated last week when the Education Department cut off federal student loan funds to Argosy after the court-appointed receiver said school officials had taken about $13 million owed to students at 22 campuses and used it for expenses like payroll. The students, who had borrowed extra money to cover things like rent and groceries, were forced to use food banks or skip classes for lack of bus fare.
    Led by Secretary Betsy DeVos, the Education Department has reversed an Obama-era crackdown on troubled vocational and career schools and allowed new and less experienced entrants into the field. “The industry was on its heels, but they’ve been given new life by the department under DeVos,” said Eileen Connor, the director of litigation at Harvard Law School’s Project on Predatory Student Lending.
    Ms. DeVos, who invested in companies with ties to for-profit colleges before taking office, has made it an agency priority to unfetter for-profit schools by eliminating restrictions on them. She also allowed several for-profit schools to evade even those loosened rules by converting to nonprofits.
    Alarms were ringing from the moment the takeover was proposed. Dream Center’s effort to buy the failing ITT Technical Institutes schools had fallen apart after resistance from the Obama administration. When it asked to buy Education Management’s schools, consumer groups, members of Congress and some regional accreditors raised concerns.

    But in late 2017, Ms. DeVos’s agency gave preliminary approval to Dream Center’s plan.

    Almost immediately, the organization discovered the schools were in worse shape than expected, with aging facilities and outdated technology. The universities “were, on the whole, failing without hope for redemption,” the receiver wrote in a court filing last month. Dream Center had anticipated a $30 million profit in its first year, Mr. Barton wrote in a recent legal filing. Instead, it was facing a $38 million loss.
    And Dream Center showed little inclination to curb the tactics that got Education Management in trouble, like misleading students about their employment prospects. The executives it installed cultivated a high-pressure culture in which profit surpassed all other concerns,
    By the end of 2018, Dream Center was facing eviction on at least nine campuses and owed creditors more than $40 million, and Education Department officials scrambled to plan for what looked like an imminent implosion.
    At a forum last month with students at Argosy University in Chicago, Mr. Dottore tried to calm an anxious crowd.

    “We will make it until June, I can pretty much assure you of that,” Mr. Dottore said, according to a recording provided to The New York Times by a student. “By hook or by crook, I’m going to get us there.”

    But on Wednesday, Mr. Dottore filed an emergency motion describing his plans to sell Argosy’s campuses, plus the South University and Art Institute campuses that haven’t been sold already. Any that didn’t have a buyer by Friday would close, he said.

    Even as Argosy campuses prepared to close, a dean at the American School of Professional Psychology in Northern Virginia emailed students on Wednesday, imploring them to attend classes the rest of the week “if we are to save the semester.”
    Argosy was supposed to pay students the extra money they had borrowed, then seek reimbursement from the government. But Argosy reported that the money was paid out even though it wasn’t, Mr. Dottore wrote in court filings, and used the reimbursements for operating expenses instead.

    A Dream Center spokeswoman did not respond to requests for comment on the fraud accusation.

    While Argosy students have little hope of getting back money they paid out of pocket, the Education Department said the federal loan debt of affected students would be forgiven for this semester. If the schools close, students can seek help under a program covering school shutdowns.
    Not all of the Dream Center schools are under threat of an immediate shutdown. Some were recently shunted to a new owner in a deal partly orchestrated by the Education Department.

    But the arrangement with Studio Enterprise, a Los Angeles company that provides support services for creative-industry training programs, raises its own questions. Studio is personally funded by the principals of Colbeck Capital Management, a New York private equity firm that set up the nonprofit owner.

    Dream Center said in July that it would close more than 30 ailing campuses across all three chains, but a few months later it reached a deal with Studio to salvage some Art Institute locations.

    As Dream Center’s problems mounted in December, the Education Department called an emergency meeting. Studio agreed to coordinate an acquisition of eight Art Institute campuses and, at least temporarily, six South University campuses.

    To maintain their nonprofit status, the agreement gave Studio the right to pick a nonprofit to buy the schools. Colbeck Capital used a Delaware-based nonprofit it created five years ago, renaming it the Education Principle Foundation, according to a state filing uncovered by the Republic Report, a site that has closely tracked Dream Center’s unraveling.

    In mid-January, a news release informed the 15,000 students at 14 Arts Institute and South campuses that their schools were owned by a foundation that hadn’t existed three weeks earlier. Two people familiar with the foundation’s plans said it intended to spin the South campuses off under their own leadership.

    Robin Von Bokhorst, listed in legal filings as the foundation’s president, did not respond to requests for comment.

    Bryan Newman, Studio’s chief executive, said the Art Institute schools had been “ignored for years.”

    “We’re coming in with the view that these schools need investment,” he said.

    Consumer groups and lawmakers, however, are questioning the arrangement. Two Democrats in Congress have asked the Education Department’s inspector general to investigate the department’s role in the deal.

    The fate of the schools in receivership is still being sorted out. The judge who appointed Mr. Dottore scheduled a hearing for Monday to determine if he should be removed. Creditors have complained about his close ties to Dream Center, and the judge wondered if Mr. Dottore was managing the situation in a way that did “more harm than good.”

    Many students agree.

    “The way they presented the receivership was that it would be beneficial to the students, but it’s actually been detrimental,” said Marina Awed, a student at an Argosy school in California, Western State College of Law, who was scheduled to graduate in two months. “It shouldn’t be this easy to defraud the Department of Education.” “

    My apologies to the NYT for lifting large portions of this article verbatim. But I’m curious who the F___ NYT thinks their journalism benefits, when the people victimized by these crimes committed by Betsy Devos and her privatized education cronies and private equity cronies, can’t afford to purchase the damned article??

    I’m also curious when the private education companies and private equity companies run off with the money students gave them in good faith, who the F___ does Betsy Devos think pays those loans?!?!?!?! Because I don’t think they come out of that B*tch’z pocket, even if Betsy Devos is the Bride of Satan.

  8. Moses Herzog

    Aaaawww, see??? My over-commenting on this blog finally pays off. I have a “Friday firing” to report. And there was so much potential for sexual harassment to flourish under Shine’s tutelage. Oh well, maybe Bill Shine can be the next athletic director at Baylor, and if that fails there should be some administrative position awaiting Bill Shine at Liberty University. Shine and Dave Brat could possibly do an “in house” study on the economic impact of an infestation of sexual harassment on a Christian campus. Bringing new meaning to the term “empirical research”.

    I feel Liberty Athletic Director Ian McCaw is bound to have a wealth of knowledge to provide for this “in house” research study.

    Or maybe Bill Shine can get a job with Ken Starr. Or as “Assailant 3” called Ken Starr, “Uncle Ken”

    Anyone else getting a warm fuzzy in their heart right now?? What a classy group of individuals. #MAGA

  9. spencer

    How much of the revisions to the payroll data is simply the annual revisions of the seasonal adjustment factors?

    1. Moses Herzog

      @ spencer
      Don’t know the answer to this question, but I do know it is a pet peeve of commenter Not Trampis. And probably rightfully so. I don’t like to tell “Not Trampis” he has a legitimate beef though because I stay away from giving encouragement to Aussies. I’m still trying to arrange some kind of a trade of nation’s leaders with “Not Trampis”, but so far he’s not buying it. I had to try, dammit. I’m overwhelmingly desperate, so now I’m thinking of sweetening the terms by just settling for one of Australia’s better city mayors. You think “Not Trampis” will bite???

      A visual symbol of me every time I think donald trump is my nation’s “leader”—->> https://goo.gl/images/s1QPRS

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