NEWS ALERT: Nonfarm Payrolls Sank 17,000 in January, First Drop in Four Years

Actually, August was originally reported as a 4,000 drop but has since been revised to show a 74,000 gain.

Similarly, private payrolls were originally reported to have declined by 13,000 in December but are now estimated to have risen by 54,000.

So is the fall for real this time? Perhaps but another upward revision should not be ruled out. Weak withholding tax receipts and a surge in jobless claims in the latest week are concerning but both the household and ADP survey employment measures registered solid gains in January. The household measure has diverged significantly from non-farm payrolls recently – see chart.

On balance, I still think recent data are consistent with a flat rather than contracting economy.