Ahead of Friday’s number …

Last month, there was a “discontinuity” between jobs added as reported by the BLS’ establishment survey of employers (114k jobs added) and the household survey (873k).

The spurt in the latter drove the unemployment rate calculation (7.8%) which raised many eyebrows.

So, what to expect this Friday?

Looking back to the beginning of 2011, job growth via the employer survey has averaged 150,000 per month; the household survey has averaged  179,000.

Said differently, the employer survey has reported about 3 million jobs added; the household survey has reported about 3.6 million jobs added.

Below is a chart that indexes the two series back to January 2011.

image

Note that for the past couple of months, the less stable household survey has bounced over and under the employer survey.

That’s what you’d expect for two comparable data series drawn from different samples.

So, statistically speaking, I’d expect one of two outcomes this Friday … either:

1) The household series “averages out” and bounces under the employer number … showing a decline of about 350k jobs and a a higher unemployment rate, or

2) The household series “serially correlates” (i.e. continues a high run) … and burps out another sizable increase in employment (say, 250k) … and another reduction in the unemployment rate.

If #1 happens, Team Obama will argue that you shouldn’t place too much weight on one monthly number … an argument that they shelved last month.

If #2 happens, Team Romney (and Jack Welch) will claim book-cooking again.

Either way, I think voters will yawn since they believe so little of what gets spewed out these days

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