Last night, I made a brief mention of changes to the birth/death adjustment for jobs numbers.

Birth/death is basically a way to deal with the fact that small companies are being formed and ceasing to exist all the time, and the normal methods, the survey of employers miss the effect on net employment.

Well, tomorrow, the Department of Labor will release their annual adjustment, and it looks like the statistical fudge factor missed 824,000 job losses.

I guess they thought that all those people had chucked it all to become professional eBay merchants, but they were wrong:

As bad as the government’s jobs readings numbers have been during the Great Recession, we’ll soon find out the real situation likely was worse.

Much worse.

ob losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it’s expected that the Labor Department’s new estimate will be a loss of 8 million jobs.

“It’s an enormous understatement of the severity of the crisis,” said Heidi Shierholz, labor economist with the Economic Policy Institute, a union-supported think tank. “It confirms that things were actually worse on the ground than what the reports suggested.”

(emphasis mine)

The phrase, “The problem is that BLS models appear to have grossly overestimated the number of new businesses that opened during the recession.” is kind of an understatement.

With banks not lending to anyone how can someone start a business anyway?

I’m inclined to think that this was something that was driven in some manner by electoral concerns from Bush and His Evil Minions^™, but that might just be tinfoil hat.