Making Sense of Seemingly Inconsistent Numbers
It can be incredibly difficult to make sense of data. A report coming from one body may tell you one thing, and another report might seem to offer a wholly different perspective.
Such is the case with August’s jobs numbers from the Department of Labor. There was a vast difference between the number projected in surveys of economists (720,000) and the number we received: a 235,000 increase for nonfarm payrolls. Adding to the confusion, the unemployment numbers dropped in the same period: from 5.4% to 5.2%. (1)
You might be better versed in these matters than the average person. For example, you might understand that these numbers are calculated differently, and with totally disparate factors considered. That accounts for how unemployment can decrease, yet jobs numbers come in so low.
To make matters more confusing, the Department of Labor and other groups measure employment in other ways. For example, ADP puts out a monthly report while the Department of Labor also releases a weekly report on unemployment insurance claims. (2)
Wise investors take the longer view, understanding that while these numbers do affect and reflect the markets, they don’t always represent the full picture. By investing in a strategy that takes years to play out, you know that the economic “big picture” isn’t a snapshot, it’s an epic film. You also have someone who thinks in terms of the big picture in your corner, happy to talk you through any questions you might have.
1. CNBC.com, September 3, 2021
2. adpemploymentreport.com, September 7, 2021
This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.