Making Financial Headlines · Page 6
October hiring arrives without checking the forecast
· New York time
October's US jobs report came in much stronger than economists had forecast. The result challenged expectations about hiring and supplied another data point for assessing the labor market. A forecast is an estimate made before the numbers arrive, not a contract requiring the economy to cooperate. When actual hiring exceeds expectations, the gap can lead analysts to reconsider the assumptions behind their assessment. It can also complicate the habit of describing a large economy with one tidy adjective. For workers, the significance of a national report depends partly on how broad conditions translate into opportunities in particular places and occupations. Businesses may consider the reading when thinking about staffing and the availability of labor. Policymakers must weigh employment alongside other parts of the economic picture, including prices. The surprise is useful even before observers agree on its full meaning. It shows a difference between what economists expected and what the report recorded, while leaving room for further assessment of the forces behind hiring. October apparently showed up for work without reading the consensus calendar. The forecasting profession now gets the less glamorous task of explaining why its appointment book was wrong.
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