Monday, July 20, 2020

Comments on BLS Reference Week

by Calculated Risk on 7/20/2020 10:05:00 AM

Just a few comments ...

Last week was the reference week for the monthly U.S. Bureau of Labor Statistics (BLS) employment report.

This means analysts will focus on the Department of Labor's initial weekly claims report to be released this coming Thursday (covering the BLS reference week) for clues about the July employment report.

The consensus is for a 1.3 million initial claims, unchanged from the previous week. Some analysts are expecting an increase in claims this week related to bar and indoor dining closings in some states - and possibly also due to the end of some Paycheck Protection Program (PPP) agreements.  For example, Merrill Lynch economists are expecting an increase to 1.5 million initial claims in the report this week.

Another interesting data point will be released on Wednesday; the Census Bureau's experimental Household Pulse Survey.

Note: Initially the Pulse Survey was planned for 90 days starting April 23rd.  Hopefully this program will be extended!

Ernie Tedeschi (former US Treasury economist) @ernietedeschi has pointed out that his survey was helpful in predicting the June employment report.

Household Pulse Survey

Employment in the @uscensusbureau Household Pulse Survey fell another -1.3 million last week alone. It's now fallen -2.6 million cumulatively over the past 3 weeks.

Seasonality & survey noise may be factors, but the HPS did an excellent job of anticipating the June jobs report.
The graph is from Ernie Tedeschi.

The Pulse Survey doesn't align exactly with the reference week.   The release on Wednesday will be for the period July 9th - July 14th, and the release the following week will be for the period July 16th - July 21th.  The reference week is the 12th - 18th.

So we will need to look at two Pulse weekly surveys for hints about the July employment report.