The private sector created a surprisingly high number of jobs last month, the Labor Department reports. Private payrolls increased 273,000, or well above the consensus forecast of 213,000 (according to Econoday.com) and substantially higher than March’s revised 202,000 advance. It’s good news, of course, but today’s upbeat release is primarily a clue for thinking that the labor market is again growing at the trend rate that prevailed before the harsh winter took a toll.
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The New York Times reminds us not to take today’s jobs report too seriously. Why? The standard glitch will likely infect the data: statistical noise. “Even when the economy is moving in a clear direction, the noise in month-to-month changes can be big enough to obscure any trend,” Neil Irwin and Kevin Quealy write on the paper’s Upshot blog. To drive home the point, the article includes a simulation of how short-term fluctuations could play havoc with our ability to interpret the data point du jour. What the article didn’t mention is that this caveat applies to every economic indicator.
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