GS and JPM On Payrolls Benchmarking

The BLS's preliminary benchmark revision indicated that the employment level for March 2023 will be revised down by 306k.

• GS: “The BLS will interpolate this downward revision backward for months between March 2023 and March 2022, and the preliminary estimate suggests that the average pace of monthly payroll growth between April 2022 and March 2023 will be revised down from 337k to 312k. The revision results from a comparison between reported nonfarm payrolls and a (near) universe count of employment from unemployment insurance records. In last year’s benchmark revision, the BLS revised up nonfarm payrolls by 506k.”
• JPM: “We had flagged the possibility of a downward revision like this for the benchmark a few weeks ago, but the revision wasn't quite as large as we had anticipated back then when we had 3/4ths of the relevant underlying QCEW data in hand. […] The downward revision to March 2023 doesn’t tell us anything directly about revisions to subsequent months of employment changes. In the past, we have found some evidence that larger downward benchmark revisions correspond with weaker revisions to subsequent months, but we don’t think the support for this idea is particularly strong, and we suspect that any downward revisions to months following the benchmark period would be relatively modest.”