Without a Suspect “Seasonal Adjustment” Payroll Jobs Fell Over 2.5 Million in January

By Alan Reynolds

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With a State of the Union address coming up, nobody could blame President Joe Biden if he mentions January’s supposedly huge 517,000 gain in seasonally adjusted payrolls rather than the actual unadjusted 2,505,000 loss.

Economist Mark Zandi, long the go‐​to guy for every fiscal stimulus scheme (Democrat or Republican), tweeted the BLS jobs report “was…so strong I don’t believe it.” He suggests we “ignore the report altogether,” and expects “future revisions will show the economy created far fewer jobs over the past year.”

In the sixties, when I managed the main floor of a Sacramento J.C. Penney store, I tried to reassure laid‐​off Christmas employees in January that, technically speaking, they were all still employed—on a seasonally adjusted basis.

Everyone knows that holiday workers are always laid‐​off in January, sometimes less than usual. A milder winter can also make January job losses look milder. In such cases (including January last year) seasonal adjustment makes huge jobs losses look like large gains on paper.

But seasonal adjustment is no paycheck.