First take on employment numbers

According to the Bureau of Labor Statistics, total employment fell by 20,000 in January. This is worse than consensus forecasts and much worse than my more optimistic forecasts. The situation is very confusing, however, for two reasons.

First, the household survey tells a dramatically different story: employment up 541,000, number unemployed down 430,000, unemployment rate down from 10% to 9.7%, employment-population ratio up from 58.2 to 58.4 percent. I generally have less faith in the household survey, but the disparity is dramatic enough to cause one to scratch one's head.

Second, the payroll employment report included two major sets of revisions. The annual "benchmark" revisions reduced employment numbers from April 2008 on, and had a major effect on revisions to data in recent months. The BLS also changed its seasonal adjustment factors, which changed employment numbers from 2005 on.

Bottom line: I don't know what the hell is going on. Time to call Bob.