Can we use national employment to nowcast Wisconsin employment? This endeavor is somewhat complicated by the pandemic. With DWD’s release today, we can evaluate the fit of the model.
Figure 1: Wisconsin NFP employment, August release (bold blue), July (light blue), nowcast based on US NFP 2021M07-2024M06 (red), +/- 1 std error bands. Source: BLS, DWD, author’s calculations.
The nowcast is based on this single equation ECM:
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