There are reasons to be skeptical about the monthly US jobs report

The latest monthly jobs report released by the U.S. BLS (the Current Employment Statistics (CES) report), claims that 517,000 nonfarm payroll jobs were added in January.

While the latest CES jobs report thus suggests that employment growth surged during January, a deeper analysis reveals concerns that create material skepticism surrounding current and past, monthly US nonfarm jobs numbers.

The concerns are more significant than just being related to seasonal adjustments, which many have pointed out are a big factor in January (the non-seasonally adjusted number was -2.5m).

The annual benchmarking process

The most pressing concern is instead in relation to the BLS’ annual benchmarking adjustment. In February of each year (with the release of January’s CES report), the BLS benchmarks its monthly CES jobs report (the most commonly followed indicator of jobs growth), against its Quarterly Census of Employment and Wages (QCEW).

The QCEW is a comprehensive measure of employment that encompasses …