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8:52 a.m. ET, February 2, 2024
What’s with all the reviews?
Friday’s huge jobs number exceeded expectations, and the December data was one of several months in which it was revised in depth. Why are economists’ forecasts often so wrong?
It is almost impossible to say with certainty how much prices rose or how many people were hired at any given time across a country’s entire economy. Finding out how many new hires there were in a given month would involve asking each employer how many people were on their payrolls. That’s why the government and other economic data providers often rely on surveys to make sophisticated estimates.
The BLS, the Census Bureau, and other government agencies that conduct surveys that inform economic reports do rigorous work to make the best estimates possible with the information they collect. And most of the time they do a tremendous job at it.
But polls, by nature, are imperfect.
Just as election polls don’t always predict which candidate will end up winning, polls don’t capture the exact true picture. However, they can be pretty close to the truth.
In electoral polls and government surveys, there is a sample size of respondents designed to be representative of the general group studied. The larger and more diverse the sample, the closer the estimate will be to the true value.
Getting a large, diverse sample requires a lot of outreach to recruit people to be part of a group that BLS and other agencies recruit to regularly respond to a given survey. The rate at which people are hired for the surveys used in many of the BLS’s monthly reports, including employment, the consumer price index, and job openings and labor turnover, has declined sharply since before the pandemic.
But Laura Kelter, chief of the national estimates branch within the BLS’s Current Employment Statistics division, told CNN that the declines can be attributed to a variety of challenges, including the voluntary nature of participating in the surveys, as well as Survey fatigue, meaning people being bombarded with too many surveys.
Also at play are changes in technology, such as caller ID and spam filtering, and increased concerns about data confidentiality and security.