EMSI’s April Forecast: 160K Jobs Gained

In mid-2014, we introduced the EMSI Job Forecast, a prediction of the previous month’s change in employment three days before the BLS releases its initial number. The goal of our forecast, which is based on a number of leading labor market indicators and data releases, is to give an early look at the current state of the labor market.

We release the job forecast the Tuesday before every monthly jobs report.

The April Job Forecast: +160K Jobs

Our model shows that employers added 160,000 net jobs in April, an estimate that includes total non-farm payroll employment (government included). This estimate would show slight improvement from March’s sharp deceleration in hiring, which (at 126,000 jobs) was the weakest in 16 months.

What’s Behind the Number?

Here are a few factors driving EMSI’s predicted jobs number:

• Real GDP grew 0.2% for the first quarter, according to the BLS’s third estimate. This is down from the fourth quarter’s 2.2% increase and well below the third quarter’s impressive 5% rate.
• Personal income did not change between February 2015 and March 2015.
• The four-week seasonally adjusted average decreased around 14,900 from the previous month, and initial unemployment claims decreased by 1,250 last week.

How Have We Performed?

We launched the forecast in August, but we’ve been tracking our model’s performance since we developed it in the summer of 2013. How have we fared?

BLS Comparison (In Thousands)

Since July 2013, EMSI’s average error is +/- 25,190 compared to the BLS benchmark. (Benchmarks are comprehensive counts of employment, primarily derived from unemployment insurance tax reports that nearly all employers are required to fill with state workforce agencies.)

What Else Are We Tracking?

Labor Force Participation Rate and Unemployment Rate

Labor force participation is a good indicator of economic health because it reveals the number of people who are employed and those who are looking for work.

When looking at the year-to-year numbers, we see that the participation rate is experiencing a steady decline rather than the improvement that we might expect as we recover from the recession. From March 2014 to March 2015, the unemployment rate decreased 1.1%, and the participation rate during the same period hardly changed, decreasing by only 0.5%.

The declining participation rate is also visible when comparing recent months. From January 2015 to February 2015, the participation rate fell slightly from 62.8% to 62.7%, and the unemployment rate held steady at 5.5%.

Our Approach

The EMSI Job Forecast is calculated using a time series of leading indicators from federal data sources. Our model includes data on initial job claims from the Department of Labor, various economic indices, and employment data from the Bureau of Labor Statistics. The job forecast covers total non-farm payroll employment in the US, including private-sector and government jobs. EMSI’s goal is to predict the BLS’s change in employment in the most accurate way, with an eye toward the preliminary monthly figure and the final number.

Note: Our monthly job forecast methodology is not related in any way to our approach to producing quarterly employment projections by industry and occupation.

About EMSI

Economic Modeling Specialists Intl., a CareerBuilder company, turns labor market data into useful information that helps organizations understand the connection between economies, people, and work. Using sound economic principles and good data, we build user-friendly services that help educational institutions, workforce planners, and regional developers (such as workforce boards, economic development offices, chambers of commerce, and utilities) build a better workforce and improve the economic conditions in their regions.

For more information on labor market data and trends, visit EMSI’s blog (http://www.economicmodeling.com/blog/) or email Joshua Wright ([email protected]).