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Barry Ritholtz

The Search for Meaning in Jobs Numbers

How other investors read the figures also matters.
The search for work.

The search for work.

Photographer: Michael Nagle/Bloomberg
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 Over the years, I have spilled far too many pixels on how overhyped the monthly nonfarm payroll report is. What matters isn't any single month, given how noisy and subject to future revisions the provisional release actually is. The recency effect makes you place a greater emphasis on what just occurred in a data series, a sign of the evolutionary leftover code hanging around your wetware.

Someone correctly guesses the number each month, but it seems to be fairly random as to which economist tossed the lucky dart. Instead of playing this game, let's look at the trend within the context of the broader economic environment. As I have noted before, this is a post-credit crisis recovery. As such, this cycle should be weaker than the typical postwar recession cycle: low growth, slower job creation, weak wage pressure. And so it has been. 

QuickTake Monthly U.S. Jobs Report