An asterisk on January's jobs report
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The U.S. government's blowout January jobs report had the lowest response rate in a decade.
Why it matters: Economists suspect that the 60.7% hit rate on the establishment survey from the 142,000 businesses and government agencies typically surveyed could mean a downward revision to the whopping 304,000 new jobs added in January.
- "A weak collection rate yields risk of an abnormally strong payroll gain that ultimately is revised lower," John Herrmann, a strategist at MUFG Securities Americas, tells Axios.
December's initial response rate came in at 61%, but the follow-up survey's response rate ticked up to 88%. That led to a significant downward revision of December's payrolls from an initially reported 312,000 to 222,000.
- There are plenty of cases in which payrolls are revised higher with future collection of establishment survey data — November's jobs report was revised up twice in the most recent example. But Herrmann says that would be unlikely for January.
- January tends to see weak job growth after companies ramp-up hiring over the holidays, then let go of temporary workers, Herrmann points out.
The big picture: Barring an unprecedented downward revision, January will be the 100th consecutive month of U.S. job growth. Even with December's downward revisions, payrolls remain solid, but the markdowns show the data may not be breaking out the way initial estimates suggest.
