Dean "Sunshine-and-Lollipops" Baker reminds us that we should be even more pesimistic about Friday's jobs report with its estimated 533k lost jobs (and downward revisions of September and October figures, bringing total job losses to -1.9 million since the beginning of the recession).
The reason, the numbers don't impute:
the Bureau of Labor Statistics (BLS) imputes jobs into its survey for new firms that could not included in its sample. This imputation is based on its "birth/death" model which is inevitably backward looking. As a result, it misses turning points, underestimating job growth when the economy speeds up and overestimating job growth (or underestimating job loss) when the economy slows.
The BLS imputed 143,000 jobs into the establishment data over the last three months based on its birth/death model. In the three months from September to November of last year BLS imputed just 117,000 jobs into the establishment data.
In short, the BLS attempts to adjust for unsurveyed new firms by estimating the jobs they create. But most certainly, new firm births are off the historical mark, so BLS is statistically counting jobs that aren't really there.