The primary appeal of the Establishment Survey over the Household Survey is its lack of volatility. It is believed that gives the observer a greater degree of precision in estimating monthly changes in employment. In the case of the government shutdown in October, it appears as if that view has been confirmed. The Household Survey showed a very large decline [...]
In 1964, Milton Friedman suggested the economy behaved like a string set along a piece of wood on an upward slope. The string, hugging the underside of the wood, represented the economy moving along the track of potential (the piece of wood), rising with productivity (the upward slope, or trend). Occasionally, an external shock would “pluck” the string downward, representing [...]
The various government agencies tasked with estimating and calculating economic parameters and accounts perform regular benchmark revisions. The scale of revisions depend on many factors, not the least of which is the NBER’s “official” determination of the exact place in the “cycle” the economy exists in any discrete period of time. However, these accounts and estimations also are subjected to [...]
Since it is an employment report Friday it seems appropriate to continue on the theme of dysfunction in the labor market. I’ve already covered the more recent occurrences of the structural change post-2009, here I want to examine the foundation for this paradigm shift. As part of its academic arm, the Bureau of Labor Statistics publishes a monthly review of [...]
The Gallup Daily US Employment poll has seen a sharp rise in respondents indicating employment difficulties in the past month or so. The unemployment rate jumped as high as 8.9% on August 20, before settling back down. But it still remains well-above not just the BLS estimations, but levels from earlier in the year and in 2012. The Gallup data [...]
Seasonal adjustments have legitimate use only when there is a recognizable and relatively unbroken patterning in a data series. But most statistical agencies and their collection methods do not or cannot process structural changes. They adjust their benchmarks via the calendar, regardless of what happens in the intervening years. That presents a large problem for seasonal adjustments and statistical estimates [...]
Chairman Bernanke stole the show yesterday, certainly by his accommodative and now contradictory stand. I suppose that is the danger in trying to talk “markets” toward “targets”, much like Greenspan in the late 1990’s. Toward that end, he made at least one prediction that will likely come true (in sharp contrast to the Fed’s history), namely that the unemployment rate [...]
Headline employment continues to look tepid, but at least moving in the right direction. However, that does not square with the GDP report from earlier this week. The headline Establishment survey average of the past few months appears inconsistent with such GDP weakness. Economists have been quick to point to the BLS employment numbers as confirmation that GDP is not [...]
More data from various sources on primary economic parameters seemingly at odds. First, unemployment claims dropped to a five-year low according to the adjusted BLS data series. At the opposite end, Gallup's measure of employment fell, suggesting to Gallup that employment has gotten worse in January 2013. Since Gallup's numbers are not adjusted, it, rightfully, compares results with January 2012 [...]
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