What’s the job number going to be this month? That question gets thrown around a lot, as does analysis and commentary of the Bureau of Labor Statistics’ jobs report once it’s released the first Friday of every month.
With so much attention paid to the national jobs picture, we decided to use our labor market expertise to come up with our own early prediction of the previous month’s change in employment—three days before the BLS comes out with its initial number. The goal of the EMSI Job Forecast, which is based on a number of leading labor market indicators, is to give an early look at the current state of the labor market.
Look for our forecast on the first Tuesday of every month.
The August Job Forecast: +236,000
EMSI predicts that U.S. employers added 236,000 net jobs in August. Like the BLS’s report, this new jobs figure represents nonfarm payroll employment. This jump would be the seventh straight month of more than 200,000 jobs gained and signal an increasingly strong labor market recovery.
What’s Behind the Number?
The strong expected growth in jobs in August is fueled by several positive indicators and data releases:
- An upward second revision in second quarter real GDP growth from 4% to 4.2%. This portends good things for the third and final revision.
- A drop in initial unemployment claims last week and from the previous month (using a four-week seasonally adjusted figure).
- Increases in personal income and new orders for manufacturers in July.
- Growth in capacity utilization for the industrial sector—which indicates the slack in firms in manufacturing, mining, and electric and gas utilities—from 79.1% in June to 79.2% in July. This rate, while nearly a percentage point lower than the 1972-2013 average, is 1.7 percentage points higher than last year at this time. In manufacturing, capacity utilization jumped from 77.9% to 78.5%.
The EMSI Job Forecast is calculated using a time series of leading indicators from federal data sources. Our model includes data on initial job claims from the Department of Labor, various economic indices, and employment data from the Bureau of Labor Statistics. The job forecast covers total nonfarm payroll employment in the U.S., including private-sector and government jobs. EMSI’s goal is to predict the BLS’s change in employment in the most accurate way, with an eye toward the preliminary monthly figure and the final number.
Note: Our monthly job forecast methodology is not related in any way to our approach to producing quarterly employment projections by industry and occupation.
Emsi turns labor market data into useful information that helps organizations understand the connection between economies, people, and work. Using sound economic principles and good data, we build user-friendly services that help educational institutions, workforce planners, and regional developers (such as workforce boards, economic development offices, chambers of commerce, and utilities) build a better workforce and improve the economic conditions in their regions.