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Matt's Market Insights

Last month in my November 10th remarks I detailed how the Bureau of Labor Statistics tweaks the raw hiring data in the monthly nonfarm payrolls report to arrive at the headline figure, which is released on the first Friday of each month.

 

To recap briefly, the BLS employs a statistical process to smooth the data based on seasonal fluctuations. Last month we saw record job creation (raw data) with 1.06 million jobs created in October. During the smoothing process, the adjustment factor that was used was the largest ever, reducing the headline jobs creation figure to 214,000. (For more detail on why the BLS does this and its effects, go back and read prior remarks.)

 

At the time, I called out the fact that the discrepancy between the raw data and the smoothed data would lead to stronger jobs data in coming months. Specifically I wrote:

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