Prediction

by the Sandwichman

May BLS Non-farm payroll employment decline: -775,000 to -835,000 jobs lost.

One of the things I noticed mucking around with the BLS birth/death model is that the Business Employment Dynamics data upon which the model is based doesn't quite seasonally adjust. That is to say the 'seasonally-adjusted' series of business openings and closings still displays a noticeable seasonal fluctuation. Thus when the imputed birth/death adjustment is added back into raw employment data and then seasonally-adjusted, the birth/death adjustment might be partly undoing the seasonal adjustment of the employment totals.

Another thing I noticed is that seasonally unadjusted January to June employment numbers consistently display a steady slope, with the seasonally-adjusted employment figures intersecting that line at April. So far this year, the January to April segment of that line has been flat, with a minor dip down in February and March followed by a small bounce in April. That small bounce might reflect the 62,000 census workers plus the residual unadjusted seasonal variation from the birth/death model.

Assuming that the flat-line slope of the unadjusted employment figure follows the usual pattern and applying a rough seasonal adjustment formula to the result produces a trend projection loss of between 775,000 and 835,000 jobs in May, depending on whether one discounts the one-time-only 2010 census jobs. The reported number could be less because of upward revision of the April job loss figure.