We all make mistakes. Some are innocent and inexpensive. Others may be costly. Each month the U.S. government admits it makes mistakes when it counts new jobs. It’s understandable given the sheer size and tight time constraints of trying to get an accurate gauge of the U.S. job market each month. But while the focus for investors and politicians is rightfully on the most recent month, the revisions give investors a deeper understanding of the shape of employment. On Friday, the July data will be released, along with revisions to the results from June and May.
Already this year the revisions to the monthly job creation figures have added 175,000 more jobs than when the data was originally released. That’s about equal to an additional month of new jobs. While this won’t attract headlines, it’s an encouraging trend indicating a stronger hiring environment than the preliminary jobs numbers illustrate.
So the margin of error between the jobs figure we see on Friday morning and the final revision to the July data coming in September could be huge. By the time government number crunchers finalized the job figures for March (in May); half again as many jobs were added to the American economy from the initial count. The revised report showed stronger hiring than first reported.
Admittedly, none of these changes reflect the quality of the jobs. And to ignore that would be a costly mistake.
Tom Hudson is a financial journalist based in Miami. He is the former co-anchor and managing editor of Nightly Business Report on public television. Follow him on Twitter @HudsonsView.