Beware of the Jan employment report. We could be surprised on the *UPSIDE* due to how the seasonal adjustment process works. Jan is the worst month of the year for seasonal layoffs; we lost an avg of 2.9 mil jobs before seas adjust every Jan since 2010. https://shar.es/aoJWF9 

Retailers top the list - they layoff >1/2 mil temp hires from holidays every Jan. Losses also show up in state & local gov’t, professional services (admin), leisure & hospitality, education, health care and transportation services (couriers and messengers) in Jan.

Layoffs at year-end and just after the end of the year are so large that the outplacement firm Challenger, Gray & Christmas put the holiday into their name. A lot of people are laid off just prior to or just after thr Christmas holiday.

But, that there was nothing normal about 2020. Seasonal hires were weak & layoffs were large. We were still almost 10 mil jobs in the hole in Dec. This means that we might not see the normal *seasonal* drop in employment that we have in Jan. Actual losses could be smaller.

Why do we care? Because much smaller than usual layoffs in Jan could show up as a large *positive* after the @BLS_gov seaonally adjusts the data. They would flag this in the front page of the write up, but few thoroughly read the actual report on employment.

Moral of the story: A large, upside surprise in the Jan employment report should be taken with a grain of salt; it should not be used as a weapon to counter arguments for additional economic aid and fiscal stimulus.

If we see a drop in payroll employment, that means the labor market is in even worse shape than we thought; it would suggest that layoffs exceeded the norm, which is already huge, despite the train wreck of a year we saw in response to COVID.