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New Model to Predict Unemployment Sees Rate at 8.1%

Posted By admin On October 3, 2012 @ 3:12 am In Money Watch | Comments Disabled

Ben Casselman
Wall Street Journal [1]
Oct 3, 2012

The big monthly jobs report doesn’t come out until Friday, but no need to wait until then to know September’s unemployment rate: 8.1%.

New Model to Predict Unemployment Sees Rate at 8.1%  OB UU638 UNEMPF E 20121002103134

At least, that’s the best guess of economistsRegis Barnichon andChristopher Nekarda, who in a paper [2] last month laid out a new method for forecasting the unemployment rate. Mr. Barnichon, of the Spanish research institute CREI, and Mr. Nakarda, of theFederal Reserve, plan to start posting unemployment projections based on the new technique in the coming months. Until then, they provided Real Time Economics with a look at their forecast for Friday’s jobs report.

The projection itself, made last Friday, isn’t particularly remarkable. An unemployment rate of 8.1% would represent no change from August, and is also the consensus forecast of economists surveyed by Dow Jones Newswires. Messrs. Barnichon and Nekarda also forecast a very gradual improvement in the months ahead: 8% in October and November, 7.9% in December, and an incremental drop to 7.1% over the course of the next year (although the authors caution in their paper that their projections become less accurate as they go further out in time).

Full article here [1]

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URLs in this post:

[1] Wall Street Journal: http://blogs.wsj.com/economics/2012/10/02/new-model-to-predict-unemployment-sees-rate-at-8-1/

[2] a paper: http://www.brookings.edu/about/projects/bpea/latest-conference/2012-fall-barnichon

[3] Ron Paul: Unemployment rate is ‘probably closer to 20 percent’: http://www.prisonplanet.com/ron-paul-unemployment-rate-is-%e2%80%98probably-closer-to-20-percent%e2%80%99.html

[4] Real Unemployment Rate 14.6 Percent in October: http://www.prisonplanet.com/real-unemployment-rate-14-6-percent-in-october.html

[5] The “Real” Unemployment Rate Jumps To 17.1%: http://www.prisonplanet.com/the-real-unemployment-rate-jumps-to-17-1.html

[6] Spain’s current unemployment rate exceeds the US rate during the Great Depression: http://www.prisonplanet.com/spains-current-unemployment-rate-exceeds-the-us-rate-during-the-great-depression.html

[7] Labor Force Participation Rate Drops To Fresh 25 Year Low, Adjusted Unemployment Rate At 11.7%: http://www.prisonplanet.com/labor-force-participation-rate-drops-to-fresh-25-year-low-adjusted-unemployment-rate-at-11-7.html

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