As I detailed yesterday, over the past few years:
the population grew at a much faster rate than previously expected
The result is that while employment data continued to improve, the number of individuals not in the labor force is much higher than previously thought. The following chart strips out the adjustment made for that higher population to show the change in employed, unemployed, and not in the labor force during the month of January.
What we see is a HUGE amount of revision, but an improving underlying situation. As an example, the number of individuals no longer in the labor force is more than a million higher than previously thought (very bad), but the number not in the labor force actually came down in January from December (as seen in the blue dot, which is a good thing).
So... what does this tell us? It tells us things were worse than we thought (and we thought things were bad), but if this new information is accurate it shows things are significantly improving.
Source: Calculated Risk
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