Lots More on the Big Problem With the Monthly Jobs Report
Odd Lots
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Focus on Rates vs Levels in Labor Market Analysis
In times of volatility in the labor market, consider prioritizing rates (like unemployment and hiring rates) over absolute levels of job creation because rates are revised less frequently. While the unemployment rate is stable, examine the employment-to-population ratio, as it reflects cyclical changes and may reveal softening not immediately apparent in the unemployment rate. When interpreting Non-Farm Payroll (NFP) numbers, acknowledge the inherent randomness and potential for significant revisions. If NFP falls outside the expected range, reassess previous policy decisions; a very low number might indicate a missed opportunity for earlier intervention.
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