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Topic: Labor statistics
Replies: 2   Last Post: Jul 11, 2011 5:52 PM

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Posts: 57
Registered: 8/26/09
Labor statistics
Posted: Jul 11, 2011 11:43 AM
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Two recent employment reports have differed so widely as
to suggest to me that either something grossly improbable
has happened or that a serious error has been made.

Last Thursday the company ADP, which provides data processing
services for over 500,000 companies, published a report
that non-farm employment rose by 157,000 jobs in the month
of June. The ADP report was based upon a survey of 340,000
companies. That report can be seen here:

The very next day The Bureau Of Labor Statistics published
their report that during June the non-farm employment
rose by 18,000 jobs. The BLS report was based upon a
survey of 140,000 companies. This report can be seen here:

The historical agreement over the last 10 years of these
two employment estimates can be seen in a graph covering
the period of 2005-2010 here:

Stock markets around the world were buffeted by the
two reports, first up on the ADP report and down after
the BLS report.

I have tried to make simple models of how ADP and the
BLS might have generated these numbers. These models
result in a ratio distribution whose parameters are
not available, but assuming that the two estimates
should be highly correlated and that the width of
either distribution is much smaller than the median,
I find the discrepancy to be too great to explain by
sampling. It seems to me that some serious error has
been made.

I invite comments by interested parties in this group.


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