The Telegraph tells us that the US jobs market is slowing terribly and ain’t this a shame:
The US jobs market has shown signs of a chill, casting a cloud over Donald Trump’s chances of re-election in November.
The labour force slowed by more than expected last month and wages rose at the weakest annual pace since 2018, although unemployment rate was steady at a 50-year low of 3.5pc.
Non-farm payrolls expanded by 145,000 in December, shy of the 160,000 expected by economists and well below the downwardly revised 256,000 increase in November. That figure was lifted by 46,000 production workers at General Motors returning to work after a strike.
This ain’t quite right. For we’ve two different measures of US jobs gains, the official one and the ADP. ADP being a payroll processing firm who go out and count how many payrolls they’re processing. The advantage of their number being that it appears a couple of days before the official one.
And there’s a thing about these two numbers:
Given that we’re talking about samples and surveys, the numbers simply will wander around a little. And given that we’ve two different methods being used here, they’ll wander differently and independently. Which is I think what’s happening here.
The ADP number was low for November, the BLS high. I think the ADP number is high this month and that the BLS will be lower.
What we would like to know is what’s the BLS number going to be and informed comment has it at around 160,000. That is, everyone is expecting some smoothing out of the previous differences in this reading of the runes.
It’s entirely true that 145,000 is lower than 160,000. But then we need to add another little thing about that official jobs number. The error bar is 100,000 either side. That 15,000 difference is not useful information, it’s well inside our simple statistical variation problem.
It’s just Hayek again – no one does have enough detailed and correct information at the centre to be able to even measure, let alone plan, the economy.