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« Thinking about Marginal Effects: A Key Concept | Main | The Card Counter: What an Investor Can Learn from Blackjack »

July 10, 2007


Bill aka NO DooDahs!

If the pundits believed their own bear scat, the level of cognitive dissonance necessary to insulate their repeated statements from the outcomes in the market would be pathological. I see these alternatives: either they believe what they write, making them both incompetent as market analysts and greatly capable of self-delusion about their abilities, or they are intentionally striking a pose for the purpose of deluding others. At the moment, I'm inclined to believe it's an act.


Marc -

Thanks for the kind words, and for your comment.

I may have done a poor job of trying to explain a difficult subject. The main idea is that what the critics are attacking, the B/D adjustment, is not very large or very important. It does not change that much. Most of the job creation is already imputed from job "deaths." Why not question that model? That's the big one since it accounts for many of the 2.5 million jobs or so created each month. Of course without these adjustments there would be no meaningful payroll job estimate. We would be waiting many months for the actual count.

Thanks again for your comment. Maybe someday I will be inspired to explain this better, since I think it is important.



Thanks for the website. It's one of my daily bookmarks.

I understand your comment about "job creation" as being 2.5M/month but what does this have to do with anything? I think it's pretty obvious that the two authors you mentioned were talking about "net jobs added" and not "jobs created exclusive of jobs lost".

For instance, if the net jobs added for a month is 175k and the adjustment is 100k of that, then you have a 57% adjustment. I don't see how you can calculate a % change with a "net" BLS adjustment applied to only the jobs created number without factoring in the jobs lost number. The BLS adjustment affects the net directly and as we've been seeing is a very substantial adjustment to this net.



Thank you Jeff,for this blog. I subscribe and never miss it, and always value your insight as another piece in the giant puzzle of investing.


Welcome, "me" and thanks for your comment.

While I am a strong interest in political issues and politics, the purpose of "A Dash" is investments. To do that, one must look objectively, regardless of who was in office.

Market historians like to compare cycles and recoveries, and tops, and bottoms, and some use these for prediction. Usually they do not have enough cases to do so.

To take the current recovery, it has generated less overall job growth than those in the past because the preceding recession was not very severe. The size of a recovery depends upon where you start. The fact that this argument is often made by Republicans does not necessarily mean that it is false.

Thanks for making a point that many folks probably think about.



You may or may not be correct in joining the argument, but the fact remains that 8 years under Clinton, job creation or whatever you choose to call it was 225,000 a month and now under Bush about half that.

I don't recall economic anxiety under Clinton but those that chose to get off wall street or out of DC will find people are pissed. They may blame illegals or Indians, but the fact is, the great American jobs machine is dead.

And you forgot to mention no wage pressure.

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