Earlier today I looked at the history of what appears to be another useful metric for monitoring the business cycle: the ratio of nonfarm payrolls to the unemployment rate in terms of its 12-month percent change. I attributed the “discovery” of this indicator to Bob Dieli, an economist who crunches the numbers at NoSpinForecast.com. But after reading the post, Dieli alerts me that I was mistaken and that he was in fact watching was the ratio of the employed to the unemployed–both in terms of the actual numbers reported each month in the household survey of the employment report. On a 12-month rolling basis, the two signals are virtually identical. Nonetheless, Dieli’s clarification is worth noting because it moves us closer to an apples-to-apples comparison in terms of the underlying data.
Daily Archives: July 26, 2012
A Mixed Bag Of Economic Updates
Today’s updates on initial jobless claims and durable goods orders bring encouraging news, albeit with a caveat: a widely followed subcategory of durable goods—commonly referred to as business investment—looks troubling. Does the weakness in business investment—i.e., new orders for non-defense capital goods less aircraft—overwhelm the brighter numbers in durable goods overall and the sharp drop in new filings for unemployment claims?