Revised US job counts likely to color appraisals of Friday’s payroll report

Prior-month revisions to US job counts are expected to have a material impact on market participants' assessments of this week's report. Since the beginning of the 21st Century, the BLS has generally underestimated the change in nonfarm payrolls in August only to post upward adjustments in subsequent reports. 

Since 2001, first-closing revisions have averaged 37,000, while the mean cumulative adjustment posted with the October release has been a hefty 65,000. Some have pointed to outsized seasonality in the data provided by respondents to the BLS' preliminary August canvasses as the culprit. 

If that is indeed the case, the 173,000 jobs added last month could be pushed markedly higher with the September release. At 69.9%, the response rate to the initial August survey was well below the 73.6% average of the prior five years. 

"Using statistical model's in-sample estimates as guides, it would not be surprising to see August's payroll increase boosted by a whopping 74,000 to 247,000, while the currently reported July gain is pared by a comparatively modest 18,000 to 227,000", says Societe Generale.