Employment Situation Prediction for January 7th, 2011
Statistics have shown there to be a meaningful relationship between the ADP Private Payrolls report and the Bureau of Labor Statistics monthly Employment Situation Report. Using data from the past 5 years, influenced by recent economic data, a prediction for tomorrow’s report has been developed.
Recently,economic information has shown a substantial trend towards improvement. Retail sales, business climate, manufacturing climate and factory orders have all shown some improvement in December. The only components of the economy that haven’t turned better lately appear to be housing and employment, two categories that are tied closely to each other. Home prices won’t rebound until employment levels improve, meaning that improvements in the employment situation must come first.
December’s employment report was a substantial disappointment. Most economists had expected 140-150,000 jobs be added. Here, I predicted 210,000 jobs would be added. Actual results showed a gain of only 39,000 jobs.
Yesterday’s ADP Private Payrolls report gave a strong indication that December’s jobs report may have been an anomaly. According to the release, 297,000 jobs were added in December. This provides a clear signal that the employment situation is likely improving. Based on this result, and on the recent relationship between the ADP results and the BLS reports, I have prepared a prediction for tomorrow’s report.
My models produced predictions ranging from 256,000 to 486,000 jobs added. Based on available data, I have developed a prediction that tomorrow’s report will show 255,000 private payroll jobs were added in December. The net jobs gain will likely be 250,000, reflecting continuing declines in government employment. In addition to these gains in December, the Bureau of Labor Statistics will also provide a revision to November’s employment figures in the morning. I expect this revision to add 75,000 positions to payrolls.
While the unemployment rate rose in December, the jobs gains my models suggest will be high enough to lower the unemployment rate to 9.6%.
Dan Hartman is a Senior Mortgage Advisor with Province Mortgage Associates of Providence, RI, and has more than 10 years experience in the mortgage industry. He also serves as an Adjunct Professor of Finance and Economics with Roger Williams University and the University of New Haven. Extensive data was researched and compiled by Thomas Khoudary of Providence College.
January 7, 2011 by Dan Hartman · 1 Comment
I have worked as a residential mortgage advisor since February of 2000 and a part of the founding team here at Province Mortgage. We believe that by doing right by a family today, we can create a relationship for life, and, hopefully, and ambassador who will share the experience with others. It is our team of professionals that helps us to create this experience.
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[...] jobs. Most economists had predicted much larger gains, ranging from 150,000-200,000 new jobs. I predicted 255,000 jobs would be added, a substantial [...]