Don't Let Jobs Noise Distract You

Nothing says "agriculture" more than a barn, and that is why the emphasis on nonfarm payrolls is so appropriate: Economists can't hit the side of a barn with their estimates for the first release of the nonfarm payroll number each month.

With this Friday's employment situation report incorporating the massive distortions of the hurricanes, a tough job is about to get a whole lot tougher. It's quite possible that the number will come in plus or minus several hundred thousand from the loss of 169,000 jobs forecast at the time I am writing.

Let's look at these errors and their origins, and then conclude by asking whether we should care come Friday. ...