From ZeroHedge, Tuesday, Feb 10, 2026 - 05:30 PM:
For the past 5 years we have often hammered the table on the biggest, most glaring fudge factor in the monthly jobs report, namely the
"birth-death adjustment" - which became a statistical fiasco in the aftermath of the covid PPP-loan scam as thousands of fake "new companies" were created to take advantage of the government's free money handout generosity - and which has since corrupted the underlying statistics in the jobs report beyond recognition again...
Almost half of all "job gains" in the past year are from an excel spreadsheet which assumes 1.84 million new jobs were created from new business creation (i.e. Birth/Death adjustment)https://t.co/C8xQNvZKYF pic.twitter.com/SyJBtBkQBd
— zerohedge (@zerohedge) May 5, 2023
... and again...
Lowering inflation also likely to require softer labor markets.
— zerohedge (@zerohedge) August 25, 2023
Translation: stop it with the ridiculous seasonal birth-death adjustments.
... and again...
holy shit: birth/death model added 412K excel spreadsheet "jobs", the second highest on record.
— zerohedge (@zerohedge) November 3, 2023
US economy sliding into recession and BLS assuming the 2nd fastest pace of new business creation in history! pic.twitter.com/KbTgO0qnqJ
[there are more "and again"'s and other tweets but I got bored]
... and so on.
We even correctly predicted - one day ahead of time - that massive, 818,000 negative jobs revision August 21, 2024 which served as the basis for the Fed's jumbo rate cut and start of the easing cycle despite sticky 3% inflation...
For those confused why the Birth-Death adjustment, once a solid statistical adjustment, became the laughing stock of the jobs report, we gave the answer in Sept 2024, when we said that "fraudulent small business creation over the past 4 years (to illegally benefit from PPP loans) is why the US labor market is such a mess (near record downward job revisions) with the Birth/Death indicator the most inaccurate it has ever been."
The good news is that after years of complaints, the BLS has finally decided to fix the underlying problem... but there will be lots of collateral damage.
Tomorrow, the BLS will release the delayed January jobs report (it was supposed to come last Friday but we had a one-day government shutdown so clearly overpaid government workers couldn't possibly figure out how to make it work). And while the report itself will be disappointing (consensus expected another mediocre print of 65K, our full preview will come out shortly), this month’s report will be accompanied by the annual benchmark revision to the establishment survey and - much more importantly - a methodological update to the birth-death model.
Now, as a reminder, the BLS's preliminary estimate of the benchmark payrolls revision indicated that cumulative payroll growth between April 2024 and March 2025 would be revised 911k lower, though as in previously occasions, the final downward revision will likely be smaller, and the result will be that tomorrow we will learn that in the period April 2024 - March 2025 the US actually created 750-900k fewer jobs.
But wait, there's more: the BLS will also update the net birth-death forecasts in the post-benchmark period (April 2025-December 2025) to incorporate information from the QCEW and the monthly payrolls survey, where a downward revision also appears likely and will likely subtract another 500-700k jobs, which never existed in the first place.
In total we expect that as much as 1 million jobs will be revised from the December 2025 nonfarm payrolls. Poof. Because, as we said in November 2023, these "jobs" were only 1s and 0s in some BLS excel spreadsheet.
The changes will also significantly shift the contour of hiring momentum. According to BBG Economics:....
....MUCH MORE
