The US economy actually lost 2.5 million jobs in January

The mainstream media cheered the news that the US economy added 517,000 jobs last month. Unfortunately, this is not true. According to the report and the St. Louis Federal Reserve, the US economy 2.5 million jobs were actually lost In January.

through Rich Dvorak: “The seasonally adjusted print for the monthly change in Nonfarm Payrolls was -2.5 million jobs. This means the headline +517K employment gain reported in January was driven entirely by a +3 million seasonal adjustment.

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This is what actually happened.

Zero Hedge reported:

And the unemployment rate fell to 3.4% — a 54-year low — down from 3.6%, while the payrolls report showed 517K job additions, the highest since July, and well above the peak forecast — in fact, a record 9-sigma consensus estimate. Beat, shock was genius because today’s report was really a shock.

But why: what happened that everyone is so wrong?

A couple of things. First, as we warned yesterday, today the BLS unveiled a number of data revisions, including updating population controls — which would have the mechanical effect of expanding the labor force — and updating seasonal factors, which further distorted the January nonfarm payrolls number (this is important because readers Read soon). This is what actually happened: