The U.S. job market is strong, but maybe not as strong as you think.
While some may take one look at the monthly jobs data and move on, government statisticians don't. They return to the numbers in the effort to get the most accurate count possible. Companies open and close. Some are late returning surveys about their payrolls. Fewer than two-thirds of the 651,000 companies surveyed monthly to generate the jobs numbers actually respond in time to be included in the first report.
That first report for February is due out Friday in the week ahead. So, too, are revisions for the past two months. And those are worth watching.
In recent months, revisions have taken some of the shine off the bright job growth. The first time the government reported the December employment data, the American economy created 312,000 new jobs _ a blow out number. In February, that number was reduced by 90,000.
The initial count of new jobs in January came in at 304,000. That was twice what most economists had been predicting. It was the best January for new jobs since 2012. The S&P 500 stock index has rallied three percent since the January jobs report was released.
Of course, there are lots of influences on the stock market beyond the jobs data _ earnings, trade policies, politics, fear and greed among them. But jobs underpin so much of what drives the market long term. It's important for investors to watch revisions to past month's employment data to see the big picture.
Revisions work both ways. Over the course of 2018, the revised data added 36,000 more jobs than the original counts. The government considers such a change from the initial data "minor."
In an economy with 150 million jobs, it is statistically irrelevant. In a stock market reacting to news by the nanosecond, the big picture can easily slip out of focus.
