Why the Jobs Report Is Probably a Throwaway

As one of the pundits who have been predicting that economic growth is about to accelerate, I’m obviously vulnerable to the charge that I’m committing the Wall Street sin of talking my book. But I think there are sound reasons for regarding Friday’s payroll report, which showed that the economy created just seventy-four thousand jobs in December—way, way below expectations—as a throwaway.

To begin with, and I apologize for repeating this almost every month, there is a lot of statistical uncertainty in the payroll figures, which are based on a survey of about a hundred and fifty thousand businesses and government agencies. The ninety-per-cent confidence interval for the reported figure is ninety thousand. What this means is that there is a nine-out-of-ten chance that the actual number of jobs created was somewhere between minus twenty-four thousand and plus a hundred and sixty-four thousand. Beyond that, it is dangerous to say too much.

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