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Revisions to US labor market data and the public’s perception of the economy

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  • Abo-Zaid, Salem

Abstract

Using the monthly “Employment Situation” reports for 1994–2013, this paper studies the revisions to US employment data. The paper shows that the first press release underestimates net job creation in expansions and overestimates it in downturns. The “errors” in reporting the data on the labor market can distort the public’s perception about the stance of the labor market and have some political consequences. This is well reflected by the finding that the job approval rating of President Obama, the index of consumer confidence, and the economic conditions index of Gallup have all been responding to the initial news on the US labor market as they were published in the Employment Situation reports.

Suggested Citation

  • Abo-Zaid, Salem, 2014. "Revisions to US labor market data and the public’s perception of the economy," Economics Letters, Elsevier, vol. 122(2), pages 119-124.
    • Handle: RePEc:eee:ecolet:v:122:y:2014:i:2:p:119-124
    DOI: 10.1016/j.econlet.2013.11.013
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    References listed on IDEAS

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    1. Steven J. Davis & R. Jason Faberman & John Haltiwanger, 2006. "The Flow Approach to Labor Markets: New Data Sources and Micro-Macro Links," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 3-26, Summer.
    2. S. Borağan Aruoba, 2008. "Data Revisions Are Not Well Behaved," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(2‐3), pages 319-340, March.
    3. David E. Runkle, 1998. "Revisionist history: how data revisions distort economic policy research," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 22(Fall), pages 3-12.
    4. Bouwman, Kees E. & Jacobs, Jan P.A.M., 2011. "Forecasting with real-time macroeconomic data: The ragged-edge problem and revisions," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 784-792.
    5. Fox, Gerald & Phillips, Earl N., 2003. "Interrelationship between presidential approval, presidential votes and macroeconomic performance, 1948-2000," Journal of Macroeconomics, Elsevier, vol. 25(3), pages 411-424, September.
    6. repec:hal:spmain:info:hdl:2441/59cr4u3mmr9pobrceptvua5g8c is not listed on IDEAS
    7. Giuseppe Moscarini & Fabien Postel-Vinay, 2012. "The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment," American Economic Review, American Economic Association, vol. 102(6), pages 2509-2539, October.
    8. Fox, Gerald T., 2012. "Macroeconomic time consistency and wartime presidential approval," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 891-902.
    9. Franses, Philip Hans, 2013. "Data revisions and periodic properties of macroeconomic data," Economics Letters, Elsevier, vol. 120(2), pages 139-141.
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    Cited by:

    1. Heinz, Matthias & Swinnen, Johan, 2015. "Media slant in economic news: A factor 20," Economics Letters, Elsevier, vol. 132(C), pages 18-20.

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    More about this item

    Keywords

    US net job creation; US unemployment rate; Employment Situation report; Revisions to employment data; Public’s perception;
    All these keywords.

    JEL classification:

    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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