Unemployment hit yet another half-century low in April and net hiring was higher than economists had forecast (253,000 vs. around 180,000). In fact, job counts have exceeded expectations in 12 of the last 13 months. It is not uncommon for forecasts to be wrong. But it is strange that they always go in the same direction – namely, always underestimate the strength of the job market.
I proposed several possible explanations for this conundrum almost two months ago, including measurement problems, a general bias towards pessimism, longer than expected delays in the aftermath of monetary tightening, etc. I’m still not sure which of these hypotheses is correct. But there are some additional signs that metering might be an issue; The report released on Friday included not only new numbers for April, but also some major revisions to data released in previous months.
For example, the March jobs growth figure was revised down by about a third between when it was first published and this last update. So it might be wise not to take the preliminary estimate of April’s gangbusters at face value.
Nonetheless, some numbers in this report are worth celebrating if they are even remotely accurate. These include the record-low measurement of black unemployment and the record-high percentage of prime-age women who have jobs.
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