Tuesday, May 11, 2004

Birth/Death Model

Here's something I wasn't aware of. According to this article in the NYPost, the Labor department uses a "birth/death" model in its calculation of the number of jobs in its monthly employment report. Essentially, the idea is that it'll take awhile for new businesses time to show up in official surveys, so they estimate the number of these jobs. Last month, an incredible 270,000 of these jobs were included in the official employment estimate.

Now, that doesn't mean that the numbers are wrong or wholly fabricated - but nonetheless this estimate is going to have a huge impact on the number of jobs counted.

(link thanks to OTB)