August Nonfarm Payroll Numbers Lower than Forecasted? Wait for the Revisions

Friday, September 04, 2015
nonfarm payroll
Thinkstock/Rawpixel Ltd

By Kevin Kliesen, Business Economist and Research Officer

Today’s employment report showed that labor market conditions remain strong. Through the first eight months of 2015, total nonfarm payrolls have increased by an average of 212,000 per month. Although today’s increase in nonfarm payrolls was strong as well (173,000), they nonetheless rose by less than markets were expecting (220,000).

Interestingly, a similar development occurred last year when August 2014 nonfarm payrolls came in much weaker than expected. This development caused some alarm, since it signaled a potential weakening in economic activity.

In fact, for the past five years, markets have overestimated the August payroll number, as shown in the figure below.

nonfarm payroll

Importantly, though, subsequent revisions indicated that August job growth from 2011 to 2014 was much stronger than initially reported, as seen in the following figure. From 2011 to 2014, the original estimated increase of nonfarm payroll employment (NFP) averaged 101,750, but the third estimate (second revision) averaged 184,250. This produces an average upward revision of 82,500.

nonfarm payroll

In short, if the pattern of revisions from the past few years holds again this year, then a reasonable assumption is that the August employment number will be revised upward—and by a lot. Accordingly, if we add this average upward revision to today’s NFP estimate (173,000), we get a projected third estimate of 255,500. (This estimate will be released in November.)

Additional Resources

Posted In Labor  |  Tagged kevin kliesenemploymentpayroll employment
Commenting Policy: We encourage comments and discussions on our posts, even those that disagree with conclusions, if they are done in a respectful and courteous manner. All comments posted to our blog go through a moderator, so they won't appear immediately after being submitted. We reserve the right to remove or not publish inappropriate comments. This includes, but is not limited to, comments that are:
  • Vulgar, obscene, profane or otherwise disrespectful or discourteous
  • For commercial use, including spam
  • Threatening, harassing or constituting personal attacks
  • Violating copyright or otherwise infringing on third-party rights
  • Off-topic or significantly political
The St. Louis Fed will only respond to comments if we are clarifying a point. Comments are limited to 1,500 characters, so please edit your thinking before posting. While you will retain all of your ownership rights in any comment you submit, posting comments means you grant the St. Louis Fed the royalty-free right, in perpetuity, to use, reproduce, distribute, alter and/or display them, and the St. Louis Fed will be free to use any ideas, concepts, artwork, inventions, developments, suggestions or techniques embodied in your comments for any purpose whatsoever, with or without attribution, and without compensation to you. You will also waive all moral rights you may have in any comment you submit.
comments powered by Disqus

The St. Louis Fed uses Disqus software for the comment functionality on this blog. You can read the Disqus privacy policy. Disqus uses cookies and third party cookies. To learn more about these cookies and how to disable them, please see this article.

Subscribe to
On the Economy

Get notified when new content is available on our On the Economy blog.

Email Alerts  |  RSS

About the Blog

The St. Louis Fed On the Economy blog features relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts.

Views expressed are not necessarily those of the Federal Reserve Bank of St. Louis or of the Federal Reserve System.

Contact Us

For media-related questions, email For all other blog-related questions or comments, email