IYY - You Can Stop Paying Attention To The Jobs Report
2024-03-06 13:33:34 ET
Summary
- Government statistics around jobs and inflation are becoming less insightful due to sampling errors and declining participation in surveys.
- Jobs reports in particular are subject to large revisions, and the more the economy is at a turning point, the larger the revisions tend to be.
- It may be time to tune out.
- For those who are macro-inclined, continuing unemployment claims are more useful to track than nonfarm payrolls.
The monthly nonfarm payroll report for the US comes out this Friday with analysts expecting just shy of 200,000 net jobs added for the month. The ADP report came out today, and jobs growth missed expectations by a bit, with roughly 140,000 private sector jobs added for the month. The market didn't react much either way. This doesn't surprise me. There's a growing body of evidence that government jobs reports aren't all that insightful into the current state of the economy. Data shows that people and businesses are increasingly reluctant to talk to the government and that response rates for economic surveys have fallen off a cliff. Nonfarm payroll surveys are taken from payroll data , but there are well-known issues with this such as difficulty tracking hiring by new firms and difficulty tracking the difference between low-paying part-time and full-time jobs. These factors are making all kinds of economic data less and less useful over time. Additionally, by the time the jobs report comes out, it's month-old news....
You Can Stop Paying Attention To The Jobs Report