Friday, June 5, 2009

Non-Farm Payrolls

When you are wrong, why not be really wrong?

Job losses came in at 345,000, well under the consensus estimate of 520,000 and my estimate of 616,000. The unemployment rate rose to 9.4%. Hours worked dropped a bit and hourly wages were flat.

The BLS also adjusted the previous months' revisions upward, fewer people were let go. I'll have to think about this number. There was no large bump in government employment, nothing stands out as a reason why the estimates were so far off.

This number confirms the overall trend that the ADP survey displayed: roughly 5.8 million jobs lost since the recession started.


buchlajoe said...

Hi Mike. Can you explain the meaning of the "birth/death" modeling ? thanks


MK said...


The BLS makes an attempt to quantify the number of jobs that are added to the economy by the formation of new businesses.

The birth/death number adjusts payrolls for the net impact of new jobs created by new firms and jobs lost by firms shutting down. These factors are not accounted for in the normal survey process.

Note, this number is not seasonally adjusted. The headline print is seasonally adjusted, so its not apples & apples.

Oddly enough, this adjustment added 338,000 jobs to the payrolls this year. This seems unlikely.

On a related note, I am currently researching a post about the big miss in today's release.