Concerning The Latest Non-Farm Payrolls

[pcoulter]

The US government uses a system to predict how many jobs were created call the Net Birth/Death model. It involves finding out how many businesses were incorporated and then predicting how many jobs should have been created. Maybe someone who knows more about this can explain it better, but I just found this some interesting information from Chuck Butler's Daily Pfennig:

"Anyway, the birth/ death model added 179,000 jobs to the total last month. Which means, if I carry one, and subtract another, jobs created in March would have really been a negative 69K. Oh, my! That doesn't sound good, does it? Of course not, so the BLS added ghost jobs. I'm shaking my head in disgust right now... "

Don't believe everyting the government tells you.

[victor]

Greetings from Spain, and excuse me if my english is nota as good as it should.

Here, we follow with great interest your employment numbers. Our market is opened in the moment of the release and the spike in volatility makes the market quite funny and dangerous.

About the net/bitrh model, just check this table :

MONTH / NET/BIRTH MODEL / FINAL NUMBER
APR 2003 / +128k / -20k
MAY 2003 / +192k / -28k
JUN 2003 / 164k / -14k
JUL 2003 / -83k / -45k
AUG 2003 / +124k / -25k
SEP 2003 / +33k / +67k
OCT 2003 / +45k / +88k
NOV 2003 / +30k / +83k
DEC 2003 / +62k / +8k
JAN 2004 / -321k / +159k
FEB 2004 / +115k / +83k
MAR 2004 / 153k / 353k
APR 2004 / +270k / +324k
MAY 2004 / +195k / +208k
JUN 2004 / +182k / +96k
JUL 2004 / -91k / +85k
AUG 2004 / +120k / +198k
SEP 2004 / +39k / +139K
OCT 2004 / +42k / +337k
NOV 2004 / +54k / 132k
DEC 2004 / +78k / 133k
JAN 2005 / -280k / +146k
FEB 2005 / +100k / +262k
MAR 2005 / +179k / 110k

I hope there are no mistakes. The data is provided by the labour dept. itself.

See how, for every given month, the figure added/substracted by the model is quite similar (or better, hihgly correlated) to same figure one yaer ago.

So, expect healthy employment numbers for the following months (April, May and June) and beware of July data.

About how this model works, I’ve read about it in safehaven.com, but I can’t remember who the poster was.

Best regards.