Wednesday, May 1, 2013

Prelude to Friday's job report

First quarter GDP growth was disappointing, so all eyes will be on the April jobs report that comes out on Friday.  But we should all heed the words of Stanford Business School professor (and former chief economist for Bush 43) Ed Lazear in a recent WSJ op-ed: "The initial reports are often inaccurate and don't say anything useful about where the economy is heading." Research has shown that the monthly job number is, on average, off by 73k jobs.  Sometimes the revision in later months is in the hundreds of thousands. 

Bottom line: even if the new jobs number is a lousy 25k or a marvelous 200k, we should neither despair or celebrate too much. 

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