was as taken aback by Friday's Non-Farm Payroll number as anyone. But I was curious as to how this huge number could be such a surprising outlier, given all the wekaness we have been seeing. Then, I dug beneath the headlines a bit, and discovered this small little hedonic adjustment to the NFP data: The CES Net Birth/Death Model. BLS notes “ There is an unavoidable lag between an establishment opening for business and its appearing on the sample frame and being available for sampling. Because new firm births generate a portion of employment growth each month, non- sampling methods must be used to estimate this growth.“ In other words, they estimate the number of jobs created by new firms which the BLS has yet to sample. Now, I have no idea how accurate or reliable this adjustment actually is. But out of Friday's headline NFP data of 274k new jobs, there was a hedonic adjustment of +257k “Birth/Death“. In other words, of the reported gains, 93.8% of the data is ana rtifice -- an hedonically adjusted estimate. Note that the Birth/Death adj. is a relatively new process, first introduced by the BLS in 2000