There’s no job numbers tomorrow morning, even though it’s the first Friday of the year. What kind of leap year nonsense is this?
Joe Weisenthal tried to cheer me up, noting that auto sales came out today. And as Joe points out in that post, auto sales are a good predictor of unemployment rate, according to this chart posted on Morally Bankrupt (“You know what people are going to do when they get a job? Buy a car.”):
Reworking that data into a scatterplot (and removing the negative), using the same FRED data, here is what we see with trend line:
As auto sales per capita go up, unemployment goes down. And we just saw a major jump in auto sales. Eric Platt at Business Insider: ”As predicted by Business Insider, statistics firm Autodata Corp. is calling the February seasonally adjusted annual rate of sales at 15.1 million units for the U.S. auto industry. Earlier in the afternoon, Business Insider forecast the rate for February would come in at 15.1 million, a substantial jump from January’s 14.1 million pace.”
And plugging an extra million into the equation means that unemployment should drop around 0.3% – to a rate of 8%. We need to be talking 300,000+ jobs to get to that rate.
All kinds of caveats – no idea if the auto sales relationship holds up, lots of unemployed are on the sidelines, which means the unemployment rate may go up even with job gains as people re-enter the work force, etc. But still promises to be a monster next Friday. We’ll be covering it on twitter starting at 8:30am sharp.
Also, as a follow-up post, here is a comparison to the Cash for Clunkers numbers, which this month’s numbers beat.