Posts filed under “Employment”
As I sat down to write this early this morning, no one knew what the jobs numbers would be. But I did know three related things:
1. The median forecast in a Bloomberg survey of economists is that 230,000 workers were added in August;
2. Almost all of the individual forecasters will be wrong. (Actually, every single forecaster was wrong, since the number came in at 142,000, way below the lowest estimate);
3. Many investors (and other finance and business professionals) hang on these forecasts as if they were Morpheus receiving word from the Oracle that “Neo is the One.”
Every now and again, it is worth reminding ourselves just how terrible humans are at predicting what will happen in markets and/or the economy.
Today’s nonfarm payroll is a perfect example: That was a big miss. Of course, I have argued in the past that the NFP is the most overrated data point in investing (see this, this and this), but it does make the point of showing just how terrible everyone is at making predictions.
The Standard & Poor’s 500 Index closed yesterday at a record high of more than 2,000. Yet many people feel that the economy is weak. There are numerous reasons for this, but the one I want to focus on has to do with employment and wages. The economy feels weak because, depending on your education,…Read More
Labor Market Dynamics and Monetary Policy Chair Janet L. Yellen FRBKC Economic Symposium Jackson Hole, Wyoming August 22, 2014 In the five years since the end of the Great Recession, the economy has made considerable progress in recovering from the largest and most sustained loss of employment in the United States since the…Read More
Central Bank Smackdown By John Mauldin July 5, 2014 BIS: The Opening Riposte Yellen’s Counter-Riposte The Coming Liquidity Crisis A Few Thoughts on the Nonfarm Payroll Number Nantucket, New York City, Maine, San Antonio, and China(?) Smackdown: smack·down, ˈsmakˌdoun/, noun, US informal 1. a bitter contest or confrontation. “the age-old man…Read More
Source: NY Times Steven Rattner: “in the sweep of history, the human condition barely improved for centuries, until the early days of the industrial revolution, when transformational new technologies (the robots of their day) were introduced. Consider the case of agriculture, after the arrival of tractors, combines and scientific farming methods. A century ago,…Read More