Tomorrow we will get the August Employment Report and many may be disappointed by the number that comes out. The consensus is expecting a gain of 218,000 jobs which would be right around trend. We are forecasting a gain of 188,000 jobs, 30,000 lower than consensus. Why?
It's because August is usually the month with the largest upward revisions. Since 2009, the initial August nonfarm payrolls number has been revised up by an average of 74,000 jobs. If you look at the chart above you can see that most upward revisions happen late in the year, but that August is the biggest month for upward rejiggering.
So don't be surprised by a sub 200,000 number tomorrow. It does not mean that the economy is weakening. If the average holds true for this year, August payrolls will be revised to well over 200,000 in the coming months.