Attention all you Wall Street “experts” who try to predict the monthly employment report! This column is for you.

The rest of you, of course, can read along. But the first item in this column is specifically for those on Wall Street who get paid a lot of money to get their economic predictions correct.

And they don’t do that often enough.

Experts: it makes me sad to say this, but you aren’t doing a very good job. And, quite frankly, I’m afraid your bosses will soon be asking why and might even — dare I say it — be cutting your fine salaries.

OK, do I have your attention? Now I’m going to tell you where you are going wrong. Ignore me at your own — and your family’s — peril.

The consensus among all the experts was that, when the Labor Department released its October employment numbers on Nov. 1, the report would be lousy. Just 85,000 new jobs would be created in the month, the experts thought.

That turned out to be very wrong. There were actually 128,000 jobs. So the “experts” missed by 33 percent.

And the number of jobs in October was reduced because of a strike at General Motors that subtracted around 85,000 jobs from the tabulation.

Not only that, the Labor Department said there were 95,000 more new jobs in August and September than it previously announced.

In other words, the “experts” will now have to close their yaps about the imminent recession, at least based on recent employment numbers.

Why were the “experts” wrong? It was because — despite my years of trying to educate them — they still don’t understand that the Labor Department makes wild guesses on some of the estimates it includes in these numbers.

For instance, the numbers released on Nov. 1 included an additional 274,000 jobs (before being seasonally adjusted) that the Labor Department thinks — but can’t prove — were created by newly formed companies too small to show up in government surveys.

Peoples’ eyes glaze over when I mention this, and I’ve been glazing eyes for years, but this guesstimate is called the “birth/death model” by the Labor Department and it is responsible for many of the miscues made by Labor figure “experts.”

This is perhaps the least understood and most important game the government plays with its economic figures because the number of jobs being created affects many other estimates made by Wall Street “experts.”

There are four months each year where this guesstimate by the government can make the employment growth figures look stronger or weaker than they actually are. October was one of those months when the figures are made to look much stronger than the employment situation’s reality probably is.

April and May are the other months when the “experts” have a good chance of underestimating job growth because the government guesses that a lot of possibly phantom jobs were created.

January – when the Labor Department subtracts a huge amount of jobs – is when the experts are likely to overestimate.

Getting eight out of 12 months right is like a .667 batting average in baseball. You’d be headed for the Hall of Fame twice. But swinging and missing on four out of 12 months of employment data will get you fired on Wall Street.

Via NY Post