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Employment Reconciliation and Nowcasting

Eiji Goto (), Jan Jacobs (), Tara Sinclair and Simon van Norden ()

No 2021-007, Working Papers from The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting

Abstract: The monthly release of employment data for the U.S. includes two different estimates from two different surveys. One is based on a survey of establishments (payroll) and the other is based on a survey of households. The presence of two different sources of information on broadly the same theoretical concept leads to an obvious question: can we combine the information to obtain an improved estimate of employment? In this paper we build on the research on combining different measures of output to instead combine different measures of employment. We construct a latent employment estimate which reconciles the information from the two separate surveys as well as incorporating the preliminary data revision process of the payroll data. We find that our reconciled latent employment series looks different than the initial release of payroll employment and is closer to the fully-revised data (benchmarked to a near census of employment), particularly during the Great Recession. Once we move to a real-time exercise, however, our findings suggest that the reconciled employment estimate is remarkably similar to the initial release of payroll employment with near zero weight on the household survey information.

Keywords: employment; United States; real-time data; news; noise (search for similar items in EconPapers)
JEL-codes: C22 C53 C82 E24 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2021-12
New Economics Papers: this item is included in nep-lab, nep-mac and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:gwc:wpaper:2021-007

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