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Evaluating BLS labor force, employment, and occupation projections for 2000
H.O. Stekler and Rupin Thomas
The purpose of any evaluation of economic forecasts is to find the sources of the errors and to improve future forecasts. The errors may result from internal procedures, assumptions, or methods, and from external inputs.1 Moreover, because the forecasts are intended to be used for some function or purpose, the evaluation should pose questions that determine how well the predictions fulfilled this intended purpose.
Thus, for a forecast evaluation to be valuable, it must pose the right questions that need to be addressed. This is true whether the forecasts are short-term macroeconomic predictions or the long-term BLS projections of labor force, employment, and occupation trends. However, an evaluation of these BLS long-term projections poses three methodological issues that usually are not encountered in analyses of short-term macroeconomic forecasts. First, no other organization made projections of these variables. Consequently, there is no benchmark for judging the BLS forecasts. Second, these projections are long-term rather than the short-term macroeconomic forecasts that have been evaluated in the past. Thus, the questions that must be addressed in this evaluation can differ from those addressed in the macro forecasts. Finally, this is a one-time forecast梩hat is, the evaluation is concerned with the BLS projections for a single year, 2000梬hile most forecast evaluations have examined multiple forecasts.
This article evaluates the labor force, employment by industry, and occupation projections that BLS made in 1989 for the year 2000.2 While these forecasts have already been evaluated individually,3 it is possible to both ask additional questions that were not addressed in those studies and to use evaluation methodologies different from those employed previously. In addition, this article, whenever possible, uses the same methodologies to evaluate the projections of all three of these variables.
This excerpt is from an article published in the July 2005 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1
A governing principle of such an evaluation is that the
forecaster should not be penalized for external errors nor benefit if the
external errors offset the internal mistakes.
2 See Howard N Fullerton, Jr., "New labor force projections, spanning 1988 to 2000," Monthly Labor Review, November 1989, pp. 3�; Valerie Personick, "Industry output and employment: a slower trend for the nineties," Monthly Labor Review, November 1989, pp. 25�; and George Silvestri and John Lukasiewicz, "Projections of occupational employment," Monthly Labor Review, November 1989, pp. 42�.
3 See Howard N Fullerton, Jr., "Another look at the labor force," Monthly Labor Review, November 1993, pp. 31�; Andrew Alpert and Jill Auyer, "Evaluating the BLS 1988�00 employment projections," Monthly Labor Review, October 2003, pp. 3�; and Arthur Andreassen, "An evaluation of the 2000 employment by industry projections," Bureau of Labor Statistics mimeo.
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