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Brookings on Job Numbers

Alternative Seasonal Adjustments Suggest Slightly Faster Jobs Growth

There are massive seasonal patterns in employment data.  For example, in July, it is typical for the US economy to lose over a million jobs.  Adjusting for this normal seasonal variation is essential to interpreting month-to-month changes in employment.  The approach for this seasonal adjustment that is presently used by the Bureau of Labor Statistics (BLS) puts very heavy weight on the current and last two years of data in assessing what are the typical patterns for each month.

Jonathan Wright of Johns Hopkins University argues in “Unseasonal Seasonals?” that a longer window should be used to estimate seasonal effects.  He finds that using a different seasonal filter, known as the 3×9 filter, produces better results and more accurate forecasts.  The key difference in the 3×9 filter is that it spreads weight over the most recent six years in estimating seasonal patterns.  This makes the seasonal patterns more stable over time than in the current BLS seasonal adjustment method.

We calculate the month-over-month change in total nonfarm payrolls, seasonally adjusted by the 3×9 filter, for the most recent month.  The corresponding data as published by the BLS are shown for comparison purposes. According to the alternative seasonal adjustments, the economy gained 357 thousand jobs last month. The Bureau of Labor Statistics reported that the economy gained 321 thousand jobs last month. The discrepancies between the two series are explained in Dr. Wright’s BPEA paper.














Thousands of Jobs Added

BLS

Author

Wright

2014-December

321

357

2014-November

243

238

2014-September

271

281

2014-August

203

204

2014-July

243

234

2014-June

267

254

2014-May

229

229

2014-April

304

304

2014-March

203

202

2014-February

222

248

2014-January

144

114

2013-December

84

85

For more recent analysis by Brookings experts on how weather and seasonality have affected the latest jobs numbers, visit our page on adjusting the monthly jobs numbers.

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