The FRED Blog recently featured an ALFRED graph to discuss a revision to the methodology used by Realtor.com to report housing inventory data. Today, we return once more to ALFRED, the archive of historical versions (or vintages) of FRED data, to discuss revisions to employment data.
The ALFRED graph above shows 12 different vintages of total nonfarm employment data from the U.S. Bureau of Labor Statistics. The graph doesn’t display the legend, to leave more room for the data (graph with legends). The solid black line shows, as of January 7, 2022, the monthly changes in total nonfarm employment for each month in 2021. The dotted red lines and circles show the initially announced and subsequently revised monthly changes in total nonfarm employment.
Consider January 2021: While employment growth was initially estimated at 49,000 persons, during the next two months that figure was revised first to 166,000 and then to 233,000 persons. Revisions to employment data are a matter of common practice. As the BLS states: “Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.” In fact, during 2021, the BLS revised up eight monthly employment figures and it revised both up and down two monthly figures. (Note: At the time of this writing, data revisions for November and December had not yet been completed.)
The second ALFRED graph shows employment data revisions during 2020. In the year of the COVID-19-induced recession, the BLS revised up eight monthly employment figures, it revised down one monthly figure, and revised both up and down three others. Those revisions are harder to see in a graph because the reduction in total employment recorded during April 2020 was staggeringly large.
However, the takeaway from this post is that employment data are always revised. Economic policymakers are aware of economic data revisions and can see through “the fog of numbers” described by Jordà, Kouchekinia, Merrill, and Sekhposyan.
How this graph was created: Search ALFRED for “All Employees: Total Nonfarm Payrolls.” By default, ALFRED shows a graph with two sets of bars: the most recent vintage and the prior vintage. To change the data units, in the “EDIT BAR 1” tab, select “Units: Change.” To customize the graph type and style of the series use the “Format” panel. Add additional vintages by using the “Add Line” tab and select the date of the desired vintage from the “or select a vintage” dropdown menu.
Suggested by Diego Mendez-Carbajo.