As we know, the inflation fire was burning in 2021, driven by the textbook inflationary ingredients of a massive boom in the money supply.  Yet the Fed continued its emergency monetary policies all along the way (zero rates + QE), dismissing the rise in prices as “transitory.”

And Congress used the Fed’s assessment to rationalize even more fiscal spending (more fuel for the inflation fire).

How could the Fed justify its claim that inflation was “transitory?”  A relatively modest job market recovery.

But as you can see in the table above, it turns out that the BLS revised UP eleven of the twelve months of nonpayroll numbers in 2021.

After the revisions, it turns out the initial monthly reports UNDER reported job creation by 1.9 million jobs for the full year. 

The economy was a lot hotter than the Fed thought. 

As we know, the Fed was wrong on inflation, and well behind the curve in the inflation fight.  

Now, let’s look at 2023 …

Remember, the Fed continued raising rates through July of last year.  And along the path of its tightening campaign, the Fed was explicitly trying to slow the job market. 

What did the BLS do along the way? 

They OVER reported job creation. As you can see in the table above, through November, the BLS revised DOWN ten of the twelve months of payroll numbers in 2023.

The job market was not as hot as the Fed thought from initial reports.

And this snapshot on the labor situation could become much dimmer with a large downward revision tomorrow.