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On November 6, in the wake of an employment report for October that showed a loss of 190,000 jobs, I presented a graph of the change in payroll employment. The graph drew a line up from the worst month of job losses (January 2009) through the job loss figures since that date. I argued that if current trends continued, employment growth would cross zero in January and be positive in February.
On December 3 I undertook a similar analysis and found that employment growth should be positive in February, maybe a bit negative in January.
On December 4, following the release of the November employment numbers, I guessed that following current trends job growth would be somewhere around 130,000 in January and 200,000 in February. Optimism grows.
On January 9 I projected trends from quarterly data and guessed that we'd have +50,000 in January and +100,000 for February.
On January 21 I used a VAR to forecast employment from initial claims data and predicted that January's employment would be +135,000.
The BLS has now revised its figures for April 2008 - March 2009, which changes the seasonal adjustment factors that it uses for the data after March 2009. The effect of the revisions are shown in the two graphs below. The decline in jobs during the recession was much worse than we thought previously, but the pace of the turnaround has not changed much. Using data from January-December 2009, I would have predicted an increase of 97,000 jobs in January before the revisions and 58,000 after the revisions. The actual number, -20,000, is lower but not much lower. It might have been slightly positive but for really bad weather in January: 75,000 jobs were lost in construction and 14,000 were lost in leisure/hospitality. Almost all other sectors of the economy showed employment increases.
So I think we're still on track. Most of my previous crude forecasts had shown January to be a mediocre month and February to be the first month of substantial gains.
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