"Adding to the uncertainty about the report, most of the job gain — 103,000 of the 166,000 net new jobs — came from an estimate that the Labor Department makes each month about how many jobs were added by new businesses. The Labor Department did not actually find evidence of these jobs; it assumed they were created based on historical patterns. In October, for instance, it assumed that new businesses in the construction sector added 14,000 jobs and new financial services businesses added 25,000. Given the weakness in these sectors right now, it is possible* that these numbers will be revised down later."There are many possible reasons for its disappearance, none of which demand a conspiratorial mindset to accept. But it is interesting that the amazing disappearing explanation of the "birth-death model**," though not named, is still the best description I've seen of it in the popular press. In fact, it's nearly the only explanation that reveals the fact that when the government releases job statistics, they are not releasing a simple count of jobs but the output of a mathematical model that includes such a count as one input.
But it is the "revised down later" part that is the most misleading part of the whole government jobs reporting scheme. As the Times noted elsewhere in the original article, the current month's number, "which beat even the highest estimates, follows a downwardly revised 96,000 gain in September, which was revised down from the previous estimate of 110,000." So while the architects and benefactors of the current job growth numbers talk up those numbers, behind the scenes (and once the reporters have gone away), they quietly mark the numbers down.
But why? If you're going to fake numbers, why bother to (partially) correct them later? There actually is a very simple explanation: marking down prior numbers allows you to report "growth" even if the numbers don't change over time. If this month's number is reported at 100, I can report growth next month by reporting the same 100, so long as I downwardly revise last month's number to 90 when no one is looking. Yes, the memories of financial reporters are that short.
* It is not possible; it is certain. How anyone can look at the current real estate market, with a record number of homes for sale, an record number of empty homes for sale, a record number of canceled contracts to build, a 50% drop in the hottest markets, and the unavailability of subprime and jumbo loans and still conclude - or believe the conclusions of others - that construction jobs are expanding is beyond me. ** Based on the assumed birth and death of companies, not individuals. That in turn is based on an assumption of where we are in the business cycle. The model's most egregious flaws were exposed very well by Mish some months back.