The US economy actually lost 2.5 million jobs in January

The mainstream media cheered the news that the US economy added 517,000 jobs last month. Unfortunately, that’s simply not true. According to reports and the Federal Reserve St. Louisa, the American economy actually lost 2.5 million jobs in January.

Over it Rich Dvorak: “The non-seasonally adjusted print for monthly changes in nonfarm payrolls was -2.5 million jobs. This means that the increase in the number of employees of +517 thousand recorded in January is entirely the result of a seasonal adjustment of +3 million.”

More reactions.

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This is what actually happened.

Zero Hedge reported:

And with the unemployment rate falling to 3.4% – a 54-year low – from 3.6%, while the payrolls report showed a gain of 517,000 jobs, the most since July, and well above the top forecast – in fact, a record 9-sigma beat to the consensus median, the shock was deserved as today’s report was indeed a miss.

But why: what happened to get everyone so wrong?

A couple of things. First, as we warned yesterday, today the BLS revealed a series of data revisions, including an update to population controls – which would have the mechanical effect of boosting the labor force – and an update to seasonal factors, which further skewed the nonfarm payrolls number for January ( this is crucial as readers will soon read). This really happened:

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