Busy weekend ahead, so I'll try to do justice to this next week. In the meantime, I refer you to Economonitor, SCSU Scholars, and Cafe Hayek for comment on the jobs data.
We may have been underestimating the number of jobs by over 800,000. That takes some of the sting out of this month's 51,000 jobs (analysts had expected more than twice that many). Barry Ritholtz again wins by going with the "under," but we may have to audit some of his previous predictions in light of what Felix Salmon calls the "mother of all revisions."
45% in unemployment, +/- 10% in GDP (Kuznets)... and if we add the degree to which CPI doesn't capture actual purchasing power... it's not looking good.
(And this is the most prosperous large economy and the most IT-equipped.)
Well, if we are going to just make up numbers (yes, these adjustments can be made into whatever our little hearts desire) then all bets are off!
Well, Barry, I'm not quite ready to suggest that the revisions are made up entirely out of whole cloth. The fact remains that even the "adjusted household survey" has diverged from the payroll survey in a systematic way in the last couple years. One could certainly argue that the labor market is still weak even after the adjustment.
The last two years have overestimated the amount of the revision both up and down. Hence, I would not be surprised if the actual revision turns out a bit lower (by a similar percentage--say as much as 25%). But subject to some forecasting error, I am confident that the benchmarking of the UI tax data does present a more accurate picture of the labor market than the monthly data alone.
If the bet is on what the size of the ultimate revision (to be announced in February) will be, shall I assume that you are with me in saying, "Under"?