Following April’s heavy disappointment when the US economy created only 278,000 new jobs rather than the million expected by analysts, May’s data came in much closer to consensus at 559,000 versus expectations of 674,000. Amid a recovery driven by the easing of Covid-19 restrictions, forecasting has become far more complex than ever before. As a result, the amount of variation in forecasts has considerably increased.
The chart below measures the standard deviation of the 80–90 US job creation forecasts that make up Bloomberg’s monthly consensus. The figure has historically hovered around 25,000, which means that two-thirds of the forecasts fall within 25,000 (plus or minus) of the average forecast. In 2009–2010, the recession and scale of recovery caused uncertainties that increased this variation to 50,000. In spring 2020, the variation reached millions, which was clearly exceptional. Today, wide variations in forecasts indicate that uncertainty remains high and standard deviation in..