Zeev's Turnips Patch-No Politics (ZEEV)

[TJ Parker]

unemployment numbers .... aha!

WASHINGTON, Dec 9 (Reuters) - The U.S. government said on
Monday it made an error in a key monthly jobs report that
affected the payroll trends during September and October and
will being re-issuing its most recent data.

The Labor Department released its November employment
report on Friday showing payrolls fell by 40,000 last month,
after a 6,000 gain in October. The report had said September
payrolls fell by 4,000.

The department also had said the unemployment rate shot up
to 6 percent in November from 5.7 percent in October.

The unemployment data will not be affected by any of the
changes because it is based on a survey of households and is
separate from the survey of business establishments that is
used to compute the payroll numbers.

John Castle, economist with Labor Department's Bureau of
Labor Statistics, said the most recent employment report would
be replaced by another report to fix the problem.

The newly revised report will be issued over the Internet
on the bureau's Web site (http://www.bls.gov/ces).

The month-to-month changes for payrolls in September and
October were likely to be affected but it was not clear how
they would be changed.

Castle would not say whether either figure would be revised
up or down.

He said there would be further changes to the report that
have to do with the communications industry's hours worked and
hourly earnings series.

He would not say whether there would be amendments to the
overall November numbers for the average workweek or average
hourly earnings, which are also closely watched by markets.

On Friday, Labor said November's average workweek stayed
steady at 34.2 hours and average hourly earnings rose 0.3
percent to $14.93.

"This release incorporates additional corrections for
nonsupervisory workers estimates in the communications industry
for October and November 2002," Castle said, reading from a
statement that Labor planned to release on the Web. "These
corrections resulted in minor revisions in some hours and
earnings series for these two months."

The payroll error was apparently brought to the attention
of the government by Stone & McCarthy Research Associates, a
firm that analyzes data and issues commentary read by many
traders on Wall Street.

Economist Ray Stone of the Princeton, N.J.-based firm said
he noticed something was amiss when the October and September
payroll numbers seemed to be at odds with his forecasts. He
said the mistake had to do with how the department smoothed out
the series to adjust for seasonal fluctuations in hiring.

He alerted the BLS late on Friday and he said they worked
through the weekend to pore over the figures and find out if
there was indeed an error.

The Bureau of Labor Statistics has had a handful of other
snafus in recent years, one of which involved an error
discovered in the Consumer Price Index and two of which
concerned the accidental posting of some data ahead of the
scheduled release time.

In September 2000, the bureau was forced to make a slight
revision to the CPI because of an error stemming from the way
the bureau measures air conditioning in housing units.

It accidentally posted some components of the jobs report a
day ahead of schedule in November 1998, causing a stir in
financial markets. In January 1999 it put market-sensitive
information on producer prices ahead of schedule onto its Web
site.