2023 is on track to be one of the three worst years for downward payroll revisions since 1979.
There have been 449K negative revisions through the first nine months of the year, trailing only the Great Financial Crisis in 2008 and the pandemic in 2020.
“Looking back historically, it’s pretty uncommon you see these large negative revisions,” explains Josh Steiner in this clip from The Macro Show. “When you do see them, it tends to be in periods of economic stress.”
“The labor market and the way people think about it (unemployment rate, Nonfarm Payroll reports) tend to be very lagging indicators,” Steiner adds.
“So, by the time we get those numbers becoming quite bad, we’re going to be in very much in the throat of the recession. It’s not that you need to see those to know things are going bad. It’s that by the time you see those, things will already have been bad for quite a while, and the market, we think, will have reflected that.”
Watch the full clip above.