The August Employment Report disappointed many who live number by number. The consensus was expecting 230,000 jobs which would have been the 7th straight month of job gains over 200,000. Instead what came in was a much slower 142,000 gain.
But the dour reactions were unnecessary. Not only are payroll numbers volatile, but August is usually the month with the largest upward revisions. Remember that August initially came in at "zero" new jobs, but was revised up to over 100,000 a few months later. Since 2009, the initial August nonfarm payrolls number has been revised up by an average of 64,000. If you look at the chart above you can see that most upward revisions happen late in the year, but that August is by far the biggest month for upward rejiggering. If the average holds true for this year, August payrolls will be revised to over 200,000. While forecasting is a humbling business, we do expect upward revisions to last month's data when the September payroll report comes out this Friday.