Before last month’s job report, we introduced the EMSI Job Forecast, a prediction of the previous month’s change in employment three days before the BLS releases its initial number. The goal of our forecast, which is based on a number of leading labor market indicators and data releases, is to give an early look at the current state of the labor market.
EMSI’s forecast is released the Tuesday before the monthly jobs report.
The September Job Forecast: +185,000
EMSI’s forecast shows that U.S. employers added 185,000 net jobs in September. Like the BLS’s report, this new jobs figure covers total nonfarm payroll employment, including government jobs. This predicted increase of 185,000 jobs represents a rebound after employers added only 142,000 jobs in August—far fewer than EMSI and other economists predicted. (See our August forecast.) Before August, the U.S. had added at least 200,000 jobs per month for six consecutive months.
What’s Behind the Number?
The expected net gain of 185,000 jobs is driven by a few mostly positive economic trends:
- The final revision in second quarter real GDP growth jumped from 4.2% to 4.6%. This came after the initial release showed 4% growth.
- Initial unemployment claims decreased more than 1,000 last week, but the four-week seasonally adjusted average actually increased from the previous month.
- The number of total new hires increased more than 81,000 from June to July, according to the BLS’s JOLTS dataset.
- Capacity utilization for the industrial sector—which indicates the slack in firms in manufacturing, mining, and electric and gas utilities—was lower in August (78.8%) than July (79.2%).
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.