Revisions to Payrolls Before/During the 2008 Recession
In advance of tomorrow’s big report from the Bureau of Labor Statistics on the condition of the U.S. labor market during the month of September and amid the growing chatter in the alternative financial media that we’re already in a recession - that we just don’t know it yet because we’re being misled by economic data that will, eventually, be revised sharply lower - it’s worth taking a look at the payrolls data from back in 2008 as it was originally reported and after all the revisions were made as shown below.
What’s interesting about this data is that, while there was a clear tendency for the jobs data to be revised lower in mid-2008 as the recession was getting underway, there were only two relatively large downward revisions in mid-2007, prior to the start of the recession in December of that year, and some pretty big upward revisions - more than 200,000 - right around the time that the recession began.
Moreover, during the year leading up to the start of the recession, during which time job growth averaged about 100,000 per month, total net revisions were a surprising +4,000, whereas, during the last three quarters of 2008 when the recession was already underway, downward revisions totaled more than 1 million.
To be sure, with average payroll gains of less than 100,000 over the last five months, our stalling economy is clearly in a danger zone (as was the case during all of 2007), but looking at the history of payroll revisions before and during the Great Recession argues that a new recession has not yet begun.