I Reject Your Reality And Substitute My Own

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Having read our Opening Bell, you will know that equity futures are going bonkers over low non-farm payroll declines, brightly shining figures that have added to the strangely optimistic market tenor. The figure dropped 20,000, but:

Wall Street economists had expected an 85,000 decline in payrolls and a 5.2% unemployment rate. They also expected a faster rise in wages.

Hurray for our side. Well, wait a minute. What's this little adjustment figure here?

Earlier research indicated that while both the business birth and death portions of total employment are generally significant, the net contribution is relatively small and stable. To account for this net birth/death portion of total employment, BLS uses an estimation procedure with two components: the first component uses business deaths to impute employment for business births. This is incorporated into the sample-based estimate procedure by simply not reflecting sample units going out of business, but imputing to them the same trend as the other firms in the sample.

Sure, a few statistical adjustments. To round out a few errors, no problem. So how large is the upward, statistical adjustment for the April figures? 267,000.
Economy Shed Jobs in April But Pace of Decline Slows [WSJ]
CES Birth and Death Model [U.S. Department of Labor]

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