Jobs Day Tomorrow, Consensus Forecast, Scorpion, Frog

June 6th, 2013 at 1:50 pm

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.


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One comment in reply to "Jobs Day Tomorrow, Consensus Forecast, Scorpion, Frog"

  1. smith says:

    As the Times is reporting:

    “The unemployment rate for college graduates in April was a mere 3.9 percent, compared with 7.5 percent for the work force as a whole.”

    But for those same college educated:

    “In 2012, the weekly median was $1,141, compared with $1,163 in 2007, after adjusting for inflation

    How much lower does unemployment have to go before anyone get’s a raise? Part of the problem (also cited in the article) are college educated taking jobs flipping burgers (a noble profession though).

    My point is how many people of the 93% not listed as unemployed realize no one gets a raise until most the other 7% are working again?

    This blog actually showed a graph with the correlation. Make that common knowledge, accepted wisdom.

    Note: Real wage increases will spiral CPI if oligopolies raise prices with impunity to retain their share of profits and deny labor real increases. Only government vigilance (regulation, anti-trust, ending corporate welfare) can prevent that.