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  #11  
Old 10-08-2007, 09:15 AM
DcifrThs DcifrThs is offline
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Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]


You might also be interested in the Birth/Death model. I'm not exactly sure how it plays in over the long run, but a lot of people say it's a bit fishy.

http://globaleconomicanalysis.blogsp...ly-flawed.html

John

[/ QUOTE ]

is the birth/death model literally just added to the monthly nonfarm payroll estimates?

are the non farm payroll estimates seasonally adjusted? (if so then the birth/death model is not added to it since the b/d model is not seasonally adjusted and cannot be incorporated in seasonally adjusted data)

where exactly is this model used?

Barron
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  #12  
Old 10-08-2007, 01:58 PM
ubiestmea ubiestmea is offline
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Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]
[ QUOTE ]
Good call on the economic calendar, very interesting.

If I could ask for just a little more clarification for what is confusing me.

If there are 100,000 more jobs than there were last month, how can less people have jobs when we just said that there are 100,000 positions that didn't exist last month.

[/ QUOTE ]

first off, unemployment (like i mentioned above) just (imperfectly) measured the % of the labor force that have jobs.

the labor force can change for a ton of reasons.

visit www.bls.gov and go to unemployment rate to see how it is exactly calculated.

it takes into account discouraged workers (i forget the real term) and drops them out. i.e. if you have stopped looking for a job b/c you couldn't find one you are "not in the labor force"

that may be innaccurate but it is close enough.

basically, just know the UE rate is not a perfect measure. it is like a capacity measure that helps to tell whether we are near the point at which any additional growth will likely be inflationary (like capacity utilization).

to more directly answer your question, there aren't "100k more jobs than there were last month" there are "100k more jobs filled than were filled last month"

so right now, more people have jobs than had jobs last month (yet more people filed for first time unemployment benefits than they did last week/month than expected).

i hope this helps. let me know if i didn't answer your Q.

Barron

[/ QUOTE ]

Followed your link to the BLS site, I see that the employment report is a sample-based estimate. I’m not a math guy but I’m guessing that their error rate would have to be very small. With the statistical sampling based on a labor force of 153,000,000 and they state 104,000 is statistically significant, what would their error rate be?
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  #13  
Old 10-08-2007, 02:21 PM
DcifrThs DcifrThs is offline
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Join Date: Aug 2003
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Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Good call on the economic calendar, very interesting.

If I could ask for just a little more clarification for what is confusing me.

If there are 100,000 more jobs than there were last month, how can less people have jobs when we just said that there are 100,000 positions that didn't exist last month.

[/ QUOTE ]

first off, unemployment (like i mentioned above) just (imperfectly) measured the % of the labor force that have jobs.

the labor force can change for a ton of reasons.

visit www.bls.gov and go to unemployment rate to see how it is exactly calculated.

it takes into account discouraged workers (i forget the real term) and drops them out. i.e. if you have stopped looking for a job b/c you couldn't find one you are "not in the labor force"

that may be innaccurate but it is close enough.

basically, just know the UE rate is not a perfect measure. it is like a capacity measure that helps to tell whether we are near the point at which any additional growth will likely be inflationary (like capacity utilization).

to more directly answer your question, there aren't "100k more jobs than there were last month" there are "100k more jobs filled than were filled last month"

so right now, more people have jobs than had jobs last month (yet more people filed for first time unemployment benefits than they did last week/month than expected).

i hope this helps. let me know if i didn't answer your Q.

Barron

[/ QUOTE ]

Followed your link to the BLS site, I see that the employment report is a sample-based estimate. I’m not a math guy but I’m guessing that their error rate would have to be very small. With the statistical sampling based on a labor force of 153,000,000 and they state 104,000 is statistically significant, what would their error rate be?

[/ QUOTE ]

you mean what is their sampling error?

if so then you'd need the standard deviation of the sample (which, i don't know). at lesat if you get it, then you can be comfortable with it since in these types of questions (jobs added), the sampling distribution can be treated comfortably as normal (i.e. one or a few massively outlying observations won't change the average that much).

further, what useful information would this sampling error give you?

and why does it matter?

i mean the # of jobs added every month is a bls estimate, sure, but i'd give them the benefit of the doubt that it is reasonably precise ...

Barron

EDIT: i just reread your question and i may not be answering it. was the 104k the jobs added/month #? because to relate that to the "labor force of 153,000,000" you'd also need the change in labor force (i.e. how much has unemployment changed on net from 1 month to the next).

typcially it is reported as a level rate rather than a change. i.e. 4.7% unemployment vs. a X% change in unemployment (since it would be a rate of change of a rate...like GDP). for labor statistics, i think most like to think in levels and rates rather than rates of change. i don't know though and i'm just trying to get at what you really what to know....

i'm just babbling at this point. can you rephrase your question in context so i know what you want to know and how you want to use it?
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  #14  
Old 10-08-2007, 04:22 PM
ubiestmea ubiestmea is offline
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Join Date: Sep 2006
Posts: 53
Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]


you mean what is their sampling error?

if so then you'd need the standard deviation of the sample (which, i don't know). at lesat if you get it, then you can be comfortable with it since in these types of questions (jobs added), the sampling distribution can be treated comfortably as normal (i.e. one or a few massively outlying observations won't change the average that much).

further, what useful information would this sampling error give you?

and why does it matter?

i mean the # of jobs added every month is a bls estimate, sure, but i'd give them the benefit of the doubt that it is reasonably precise ...

Barron

EDIT: i just reread your question and i may not be answering it. was the 104k the jobs added/month #? because to relate that to the "labor force of 153,000,000" you'd also need the change in labor force (i.e. how much has unemployment changed on net from 1 month to the next).

typcially it is reported as a level rate rather than a change. i.e. 4.7% unemployment vs. a X% change in unemployment (since it would be a rate of change of a rate...like GDP). for labor statistics, i think most like to think in levels and rates rather than rates of change. i don't know though and i'm just trying to get at what you really what to know....

i'm just babbling at this point. can you rephrase your question in context so i know what you want to know and how you want to use it?

[/ QUOTE ]

Just asking as an extension to my confusion over why people give so much credence to this report.

The 104k is from their FAQ “An over-the-month employment change of 104,000 is statistically significant in the establishment survey”. Since there is rarely a 104K change from month to month I don’t understand why so much is made of numbers that according to the BLS aren’t even statistically significant.

It seemed to me that with statistical sampling based on a labor force of 153,000,000 and 104k being the point that the results became statistically significant, they are claiming a pretty high level of accuracy. Most other reports have an error rate in % I was just curious what this reports % error rate was to compare and contrast with others to see if they really are claiming an unusually high level of accuracy.
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  #15  
Old 10-08-2007, 07:13 PM
DcifrThs DcifrThs is offline
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Join Date: Aug 2003
Location: Spewin them chips
Posts: 10,115
Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]
[ QUOTE ]


you mean what is their sampling error?

if so then you'd need the standard deviation of the sample (which, i don't know). at lesat if you get it, then you can be comfortable with it since in these types of questions (jobs added), the sampling distribution can be treated comfortably as normal (i.e. one or a few massively outlying observations won't change the average that much).

further, what useful information would this sampling error give you?

and why does it matter?

i mean the # of jobs added every month is a bls estimate, sure, but i'd give them the benefit of the doubt that it is reasonably precise ...

Barron

EDIT: i just reread your question and i may not be answering it. was the 104k the jobs added/month #? because to relate that to the "labor force of 153,000,000" you'd also need the change in labor force (i.e. how much has unemployment changed on net from 1 month to the next).

typcially it is reported as a level rate rather than a change. i.e. 4.7% unemployment vs. a X% change in unemployment (since it would be a rate of change of a rate...like GDP). for labor statistics, i think most like to think in levels and rates rather than rates of change. i don't know though and i'm just trying to get at what you really what to know....

i'm just babbling at this point. can you rephrase your question in context so i know what you want to know and how you want to use it?

[/ QUOTE ]

Just asking as an extension to my confusion over why people give so much credence to this report.

The 104k is from their FAQ “An over-the-month employment change of 104,000 is statistically significant in the establishment survey”. Since there is rarely a 104K change from month to month I don’t understand why so much is made of numbers that according to the BLS aren’t even statistically significant.

It seemed to me that with statistical sampling based on a labor force of 153,000,000 and 104k being the point that the results became statistically significant, they are claiming a pretty high level of accuracy. Most other reports have an error rate in % I was just curious what this reports % error rate was to compare and contrast with others to see if they really are claiming an unusually high level of accuracy.

[/ QUOTE ]

i gotcha now.

the next question is "significant at what level? 90? 95? 99?" that makes a huge difference too.

judging from the way you relayed the quote though i'd guess 90% since it seems to cross the statistically signifcant barrier at 104k.

either way it's a good point, but in general i think despite the signifance level, it is how it comes in vs. the other (significant or not) expectations of bloomberg surveyed economists.

also, i don't htink compairing the figure of 104k to the 153,000,000 isn't appropriate. the comparison would be comparing 104k to the rate of change of the labor force.

that is apples to apples.

i guess though that would only make sense if both #s were significant.


Barron
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  #16  
Old 10-08-2007, 11:25 PM
jtollison78 jtollison78 is offline
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Join Date: Aug 2004
Posts: 272
Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]
[ QUOTE ]


You might also be interested in the Birth/Death model. I'm not exactly sure how it plays in over the long run, but a lot of people say it's a bit fishy.

http://globaleconomicanalysis.blogsp...ly-flawed.html

John

[/ QUOTE ]

is the birth/death model literally just added to the monthly nonfarm payroll estimates?

are the non farm payroll estimates seasonally adjusted? (if so then the birth/death model is not added to it since the b/d model is not seasonally adjusted and cannot be incorporated in seasonally adjusted data)

where exactly is this model used?

Barron

[/ QUOTE ]

Here's one explaination I found, from:
http://www.dailyreckoning.com/Featur...son060107.html

[ QUOTE ]
Their methodology goes like this:

- The Net Birth/Death model first creates jobs on a non-seasonally adjusted basis;

- The computer-generated jobs are then added to the jobs actually reported by the payroll survey for the month;

- The new total is then seasonally adjusted which creates the reported monthly unemployment number announced to the public. It's only much later that ongoing payroll surveys confirm or rebut the estimated job creation.

[/ QUOTE ]


Hope it's helpful,
John
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  #17  
Old 10-09-2007, 12:31 AM
DcifrThs DcifrThs is offline
Senior Member
 
Join Date: Aug 2003
Location: Spewin them chips
Posts: 10,115
Default Re: 110,000 New jobs, Unemployment up ???

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]


You might also be interested in the Birth/Death model. I'm not exactly sure how it plays in over the long run, but a lot of people say it's a bit fishy.

http://globaleconomicanalysis.blogsp...ly-flawed.html

John

[/ QUOTE ]

is the birth/death model literally just added to the monthly nonfarm payroll estimates?

are the non farm payroll estimates seasonally adjusted? (if so then the birth/death model is not added to it since the b/d model is not seasonally adjusted and cannot be incorporated in seasonally adjusted data)

where exactly is this model used?

Barron

[/ QUOTE ]

Here's one explaination I found, from:
http://www.dailyreckoning.com/Featur...son060107.html

[ QUOTE ]
Their methodology goes like this:

- The Net Birth/Death model first creates jobs on a non-seasonally adjusted basis;

- The computer-generated jobs are then added to the jobs actually reported by the payroll survey for the month;

- The new total is then seasonally adjusted which creates the reported monthly unemployment number announced to the public. It's only much later that ongoing payroll surveys confirm or rebut the estimated job creation.

[/ QUOTE ]


Hope it's helpful,
John

[/ QUOTE ]

thanks.

that stuff in bold i think is what i'd really like to see. if they confirm it with actual jobs created then this should be easy as pie right?

how is the "created" - "actual" jobs distributed?

seems easy if we can get those data.

Barron
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