The Birth/Death Adjustment Was Responsible For Over 50% Of The Payroll Gains In The Past Year

Tyler Durden's picture

Every time someone brings up the backing out of the birth death adjustment from the Non-Farm Payrolls number (which 99% of the time are additive), economists get all defensive and say you can't really use that number because it is akin to comparing apples to oranges, it is only applicable for the Non-Seasonally Adjusted NFP data (while the numbers that make the headlines are the seasonally adjusted ones) which of course means that the conversion from the NSA to SA number is a product of a multivariate equation with two unknowns (the B/D adjustment and the actual seasonal adjustment). Of course, this is just how the BLS likes it: after all this gives them plausible deniability to blame either X or Y or a combination thereof, but never disclose just what is the culprit for any specific discrepancy. So what does the BLS tell us to do when attempting to eliminate the B/D benefit? Simple: add or subtract the B/D adjustment from the Non-Seasonally Adjusted number. Yet when doing it on a quantized, monthly basis this is impossible due to the abovementioned layering of the seasonal adjustment.

Well, there is a very simple workaround: just look at the Year over Year change in the Non-Seasonally adjusted numbers. After all that will eliminate all the intrayear seasonal adjustments, leaving just two clean numbers at the beginning and end of the full year sequence. This works like a charm when looking at June 2010 and June 2011 numbers, on both a Seasonal and Non-Seasonally Adjusted basis. The difference in the NSA series is 1,171K jobs, while the SA is 1,036K, almost a perfect match. And after all we have been hearing for so long how the administration has added 1 million jobs in the past year.

Luckily, now that we have a benchmark that does not need a seasonal adjustment, we can determine precisely what the Birth-Death contribution to the "jobs added" over the past year has been. The result: 606K, or 52% of the NSA jobs added (and 58% of the actual, seasonally adjusted jobs).

The chart below shows the monthly Birth/Death adjustments between June 2010 and June 2011.

The total is 606K jobs.

And as a reminder, the total Non Seasonally Adjusted jobs added over the same period, a number which encompasses a full calendar year period and thus needs no seasonal adjustment, includes in it this same Birth-Death adjustment.

And as noted above, the difference in the NSA jobs between June 2010 and 2010 is 1.1 million (June 2010: 130,908K, June 2011: 132,079K), and 1.0 million SA (June 2010: 129,981K, June 2011: 131,017K).

So we wonder, how long before someone, anyone, points out that well over half of the job "gains" in the past year have come from a purely statistic fudging of data, based on the same endless growth assumption that destroyed the credibility of the ratings agency excel models, and which has no actual mapping to real jobs?


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glock19's picture

All that Filipino meat....but no potatos

Clueless Economist's picture

Hey Pal, I invented that Birth Death Adjustment. How in heck doya think I won that Nebel Prize?

TruthInSunshine's picture

Dr. Paul Krugman,

If you were to advice the TOTUS..errrr POTUS...who doesn't seem all that interested or knowledgeable in economic matters, would you advise him to have Geithner print and sell the equivalent amount of debt that now comprises the U.S. National Debt, in order to pay off said existing U.S. National Debt?

Also, would you advise more shovel ready projects, and in terms of expediency, would having the U.S. Government build shovel factories, to produce shovels, and hand out to all Americans, to allow us the opportunity to dig ourselves out of our collective debt, be prudent?

Clueless Economist's picture

The answer to your questions are Yes and Yes.  Keynes has all the answers

Problem Is's picture

But Pauly-Boy... You keep putting the Keynes answers to the wrong questions...

Try this for answers...

Like all PhD Economist from the "right" schools...

It has just one black plastic ball...

camaro68ss's picture

why have you not updated us on the T Bill sales after QE2. I want to know whats going on

Cognitive Dissonance's picture

Dammit Tyler, there you go again being all logical and stuff. WTF? Drink your fracking Kool-Aide and STFU.

"We now return you to your regularly scheduled programming......right after a few words from our sponsors."


<as if I need to use the /sarc tag....but there are a few new trolls who need to be trained so what the heck, why not?>

TruthInSunshine's picture

They will ultimately send the jackals after TD and all others who factually rip apart the seams holding the Matrix together, on a daily basis, and who prove that the Main Stream Media, and especially the vaunted 'financial press,' including that stalwart of integrity and honesty all things economic reporting - CNBcS - is as useful as teets/tits on a bull.

The pen is mightier than the sword, however.

And there are galaxy sized flaws in the code of the Matrix.

coppertop's picture

Hows that pot prescription working out?

TruthInSunshine's picture

How's that operation Sock Puppet thingy working out?

TruthInSunshine's picture

mmmm...delicious taxpayer nectar ftw.

Do you get surf to porn on the your taxpayer paid for computer and broadband, too?

The SEC peeps get to surf porn. Lots of it.

If you don't, you should file a grievance for your union to petition redress for.

coppertop's picture

Rock! with your crawford out!

Problem Is's picture

Another 7 week bitch...

The 9th Rule of Fight Club
Newbies have to STFU and read their first 26 weeks...

You did, Sunshine...

knukles's picture

So it's true, Cindy Crawford did get a penis implant?
SEC viewing eligible.

Problem Is's picture

Cindy just has a really big clit...

hambone's picture

F'ing A TD,

what are going to mention next?...imaginary jobs added via B/D and real people imagined out of existence in lower participation don't really add up to a recovery?

Your bullshit is costing our gov significant amounts of time / effort to counterbalance (ok, significantly overcome) w/ propaganda.  Then again, I guess I should be thanking you for all the stimulation created to employ thousands (more?) to contradict what our foolish eyes attempt to tell us is reality.  Thank god there are minions out there to reassure us that fairy tales do come true.

hambone's picture


you are telling us what we know - that we are being openly, brazenly lied to and manipulated by our leaders.  Totally agree.  And it goes deeper and deeeeeper and deeeeeeeeeeeeper.

So what? 

What the fuck are we doing here?  Hop along and profit from the lies like RT or the like?  Tear it all down?  How?  Just piss and moan and prepare for...?  Sometimes all the knowledge is far worse than none at all.  Like watching a horror flick where you see it all coming but can't warn the victims or stop the outcome...

Yes, of course I'm doing all I can to prepare myself and my family but F'ing A - seems so inadequate.

Oh regional Indian's picture

hbone, i think the point might be that these guys and their lying Statisticians could have manipulated this report too.

They did not. Means time for bitter medicine is now at hand. That is how I see it.

Cascading bad news next week.


hambone's picture


I forget when I'm supposed to believe it's a fraud (disregard) and when they think I'll think it's a fraud so they put out the real stuff (or double down on the fraud)...


Oh regional Indian's picture

Dilemma eh hambone?

Anyone with a weak BS detector in these times will get taken for a ride. Or two!


RichardENixon's picture

They're gonna have to turn that Birth/Death adjustment dial up to 11, post haste.

Cognitive Dissonance's picture

Oh no, it only goes up to 10.

"I need more power Scotty. I've got to have more power."

coppertop's picture

You're able to do pictures andd this is what you give us?

hambone's picture

No heaving breasts, no grand canyon deep cleavage, no gratuitous bouncing flesh???

The mob has spoken and called you a "knob".

coppertop's picture

its funny how you dont resemble a mob at first glance

hambone's picture

But on the second or third glance I do resemble a mob?  Makes sense to me as I can barely hear myself think over all the voices shouting in my head.

Cognitive Dissonance's picture

I'm pleased to see you are beginning to use capitalization and punctuation. Wonderful.

Now let's work on spelling. See that check mark with the 'ABC' over it on the comment tool bar? That's the "spell check' function.

Repeat after me.    S P E L L    C H E C K

Very good! Class dismissed until Monday. But not before some Jackson Five and their hit single "ABC".

IrishSamurai's picture

Good thing you fixed that (capitilation) ... you nearly pwned yourself.



Cognitive Dissonance's picture

Good thing alright. Remember boys and girls, we must always apply a little common sense for those times when the spell check passes a word that is clearly wrong. But that was next week's lesson.

Thank you for playing along at home and we have some fine parting gifts for you as a token of our gratitude. Please send $49.95 for shipping and handling to and we'll ship your prize as soon as Tyler confirms receipt of the fee.

Have a nice day!

IrishSamurai's picture

You must be from the Obama administration ... using the DDD strategy to address when you actually make a mistake ...

Cognitive Dissonance's picture

Where have you been dude? I haven't seen you in like....months. Like many months.

Breaking in those alter egos again without exercising your primary? Dude, get with the program. You know the basics.

IrishSamurai's picture

NAMBLA?  Really?

Wow. I. Am. Like. So. Burned. By. Your. Wit.

IrishSamurai's picture

Only 1 avatar ... not a frequent poster ... Mark Twain and all that ...

Plus captcha like "BLANK minus 30 equals minus nine" that only allow 2 characters are like putting the dude you jacked in a round room and telling him to piss in a corner ...

Speaking of which ... based on his latest response, carry on ... he's the douche ...


inkarri9's picture

Give it a few months.  Isn't that how long it took the Democrats to figure out that Obama was discussing SS cuts before they "realized" was what going on?

knukles's picture

The Progressives getting lost in the old fashioned Liberal doublespeak lifted whole cloth from the Left's association with the Democratic Party.  

I am more equal than others's picture

the demographic distribution of death is asymetric.  so economentalist skew it back to a symetrical distribution which means a lot of 30 yr olds are clicking off at record numbers.  But when I read the obits and look at the ages I see a bunch of retired people - long since retired.  I guess maintaining their gardens is counted as a job. 

IrishSamurai's picture

Mr. Blutarsky ... the Birth/Death model is for businesses, not people.

mayhem_korner's picture

Mr. Blutarsky - LOL

Yes.  Opacity is the key to the kleptocrats' empowerment.  Numbers must be non-disprovable.

knukles's picture

Yes, like stimulus having created 127,354, 399,405.33 jobs within the last 3.1135 years.

goldm3mb3r's picture

Kick off a war, set up a draft.

carbonmutant's picture

That script is embargoed until next year...

Cognitive Dissonance's picture

Question: What do you do when you already have a "war" president?

Answer: Easy silly. Make more/bigger wars. Now get back to work slave. Or do I report you to the draft board as available?

carbonmutant's picture

It appears the current answer is to redefine war as something like "limited kinetic action"