In a recent post titled "ECRI Betrayed by Their Own Index," I noted the apparent inconsistency between the Economic Cycle Research Institute's (ECRI) current recession call and the recent strength of ECRI's proprietary weekly leading indicators series.
In response to that post, James Picerno, the editor of Capital Spectator, shared some of his thoughts on recession forecasting and provided links to articles on the Capital Spectator Economic Trend Index (CS-ETI) and the use of probit models to estimate the probability of a recession. I was intrigued by his research and by the accuracy of his models. He opened my eyes to the benefits of forecasting recessions.
Non-Farm Payroll (NFP) Model Forecast – October 2012
I introduced a simple non-farm payroll forecasting model last month. Since then, I have revised the model, which improved the fit and reduced the standard error. This article explains the current forecast for the October non-farm payroll data, which will be released tomorrow morning.
Continue reading →