Why The September Jobs Report Estimate of 114k Jobs Created Is Probably Too Low
The Washington Post @washingtonpost
September jobs report said the economy gained 114,000 jobs. Here's why that's probably too low: http://wapo.st/RqUpgc via @DylanMatt
_____It does appear that the BLS is getting better at estimating. The average report in the 1980s was off by 72,150 jobs, while the average report in the 2000s was off by 48,060.
But estimation suffers a lot during downturns. The average error during a downturn is 89,321, and usually the initial estimate of jobs lost is too low. During the recent financial crisis, for instance, the initial BLS estimates each month underestimated job losses by, on average, 50,000 per month. All told, the initial monthly reports underestimated job losses by 950,000.
Let me repeat that — almost a million job losses were not counted in those initial reports. That, arguably, was a major reason why fiscal and monetary stimulus failed to get us back to our level of employment. The Obama administration and the Federal Reserve just didn’t know the full extent of the jobs crisis in 2009.
But the silver lining is that, since the downturn ended, the economy has been gaining jobs faster than the initial monthly reports suggest. Since June 2009 — when the recession officially ended — revisions have, on average, added about 30,000 jobs to the initial estimate. That adds up to 1.1 million more jobs than the reports initially counted.
While the monthly figures aren’t updated more than twice, the annual figures get one final look-through, called a “benchmark revision.” The revision for 2011 found an even bigger discrepancy. That report concluded that we gained 386,000 more jobs between April 2011 and March 2012 than previously estimated, whereas the monthly revisions found a gain of only 340,000 additional jobs. So if September’s jobs report fits the pattern, it’s likely to get revised up — just as August and July did before it . . .
read more: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/08/september-jobs-report-said-the-economy-gained-114000-jobs-heres-why-thats-probably-too-low/?Post+generic=%3Ftid%3Dsm_twitter_washingtonpost
