Time for a little Stats 101 (stay with me, there’s no quiz).
In statistics, the correlation coefficient measures how closely two things move together. The closer it is to 1.00, the tighter the relationship. A 1.00 is a perfect match, like peanut butter and jelly.
The official BLS Jobs Report comes out tomorrow morning, but we got a sneak peek from the Revelio Labs jobs report. Revelio shows only 26,000 jobs added in October, while the market is expecting 60,000 to 65,000. That’s a big miss.
So how much should we trust Revelio? Its correlation with the BLS report is 0.83. Not a perfect 1.00, but solidly in the “pretty good friends” range. Think of it as the weather app that’s usually right, so you bring the umbrella anyway.
Why it matters: Weaker job numbers tend to be good news for bonds, and good news for bonds usually means better mortgage rates. It’s one of the few times a bad report card can make everyone happy.
We’ll know tomorrow whether Revelio called it. Fingers crossed.
Time ot get pre-qualified http://www.YourApplicationOnline.com
