As OTE’ers know, I have long lobbied for being as explicit as possible about the uncertainty in our economic estimates and forecasts. Which is why I was very happy to get this survey from the Bureau of Labor Statistics today, asking whether they should present the monthly payroll jobs number (the net gain/loss of payroll employment) with confidence intervals. Right now, you just get the point estimate, with no information as to, say, the 90% confidence interval, i.e., the range of values around the monthly estimate for which there’s a 90% chance that the actual value is within that range.
For example, showing this interval would allow you to see whether the confidence interval around the monthly change “crosses zero,” meaning the actual change that month could have been negative or positive (the 90% interval around the overall payroll change is about plus or minus 100,000 jobs).
I would never try to influence any votes, of course, but I think this practice would constitute a real advance. The extent to which noise moves markets is…um…pretty unsettling. Of course, this won’t change that, but it’s a small step the right direction.
The Bureau offers two choices as to how to present the material. Again, the main thing is you take the survey, but I found that I had to do mental math on chart 2 to get back to the result in chart 1. Just sayin’…
BTW, don’t ya just love BLS? They’re not only constantly putting out great stuff. They’re trying to figure out how to make it better, and they’re reaching out to us users for input. Warms me wonkish heart.