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« Mortgage Availability and Personal Consumption: The Dubious Relationship Breaks Down | Main | Payroll Employment Report and the Birth/Death Model »

May 02, 2007

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» New job creation slows significantly from Econbrowser
No, I don't like the latest employment numbers. [Read More]

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Time and Attendance

Support the kind of journalism done by the NewsHour... Become a member of your local PBS station.

Missionary Mom

Very interesting. Thanks for those little known facts.

oldprof

Hi V -

Thanks for stopping by with your comment.

Alan Abelson writes the lead column in Barron's. He is clever and witty. We all enjoy reading his column. He is a certified perma-bear, so you had better say something quotable in that direction if you want a mention.

Whether it helps one's career is questionable since he has been wrong for a long time. Some believe that any press is good press!

Since we just look at the data, changing positions as indicated, our only hope is that someday our viewpoints will align.

Jeff

theroxylandr

Who is Abelson and how sharp one should be to be quoted? Is that an important career event?

V

I love when a conspiracy theorist says he doesn't believe in conspiracy theories .... then tightens his Tin Foil Hat as he tells us "objective" truths

oldprof

Barry -

Thanks for commenting!

As a daily reader of The Big Picture I know how you feel about the Birth/Death model, but I think your conclusion is incorrect.

I suppose that I'll need a separate piece on Birth/Death, but let me summarize for the moment.

First, it is incorrect to say that "like any model, it has an inherent bias." The time series is reviewed quarterly and updated if necessary. If there is a bias, they try to catch it soon.

Second, it is compared to actual data annually. That is the benchmark.

Finally, the fact that over 40% of job growth comes from new businesses is reality -- and a reality that has been downplayed for years at The Big Picture. One of my great disappointments is that when the actual data came in, you never said "Wow, that was bigger than I thought."

Thanks again for your comment. Better than anyone else you sharpen the issues. I expect that Abelson will quote you tomorrow!

Jeff

Barry Ritholtz

I don't believe the BLS purposefully cooks the books (conspiracy theorists notwithstanding) -- but like any model, it has an inherent bias, and the BLS bias is IMO to the upside.

As to the BLS Birth/Death revisions, it was a minor element, until 2001 -- when it was revised and made more significant.

In 2006, for example, of the 2.26 million new jobs that BLS reports as being created, 964,000 --42.6% -- were due Birth/Death adjustments.

The measure is an estimate, and perfection shouldn't be expected. But that is quite a large guesstimate of the total number of jobs created, versus the usual survey/extrapolation method.

oldprof

Thanks for the comments!

Glad you enjoyed the post.

Jeff

Brian

Great post! I've recently stumbled onto your blog and I love it so far. Keep the insight coming. I could use it.

Nova Law

I enjoy your blog precisely for posts like this. Truly a "Dash of Insight." More than a dash, to be honest.

RB

Great post!

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