Earlier this year, 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 every monthly jobs report.
The October Job Forecast: +247,000
EMSI’s forecast shows that U.S. employers added 247,000 net jobs in October. Like the BLS’s report, this new jobs figure covers total nonfarm payroll employment, including government jobs. This predicted increase would be on par with the 248,000 jobs added in September and would continue the labor market’s positive trajectory in 2014.
What’s Behind the Number?
The expected net gain of 247,000 jobs is driven by a few factors:
- The advanced estimate for third-quarter GDP was 3.5%.
- Personal income increased in September by 0.2% to $22.7 billion, according to the Bureau of Economic Analysis.
- The four-week seasonally adjusted average initial unemployment claims dropped from the previous month by 16,000, and slightly decreased from the previous week.
How Have We Performed?
We launched the forecast in August, but we’ve been tracking our model’s performance since we developed it in the summer of 2013. Here’s how we stand:
BLS-EMSI Comparison (In Thousands)
|BLS Initial||BLS Revised||EMSI|
In recent months (especially before August), we’ve been very close—or spot on—to the BLS revised number and/or the initial number. Since July of last year, EMSI’s average error is +/- 40,000 compared to the first BLS release and +/- 42,000 compared to the BLS revised number.
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.