We end the first week of June tomorrow AM with a look at the jobs picture for last month. I’ll share my take shortly after the 8:30 release. For now, here’s the consensus forecast, courtesy of Bloomberg:
As you can see, that’s a total rear-view-mirror forecast (or “auto-regressive” if you want to be nerdy about it). “What’s going to happen this month? Same thing that happened last month…” And nothing wrong with that. My own forecast is a bit more bullish on payrolls: 178K total, 180K private.
Why, you may well ask, do we even bother with these forecasts? The 90% confidence interval around the payroll estimate is 100K, and there are numerous adjustments to the monthly data that make forecasting a total crap shoot (seasonal adjustments, imputation of firms’ birth and deaths). And the revisions are large enough that even if you happen to guess payrolls correctly on the first release, you could easily be way off once the final number is nailed down (the first read on Feb’s payroll gain was 236K; the third read was 332K, a revision just shy of 100K).
We do it because, like the scorpion said to the frog as they were both dying, “It’s our nature.”
UPDATE: The inimitable GL turned the title of this post into a very fetching 5-7-5 haiku!
Jobs day tomorrow!
Here’s the consensus forecast
Scorpion and frog.