Forecasting unemployment: a small business-survey model; Small business plans and expectations provide accurate and timely forecasts of national employment

Business Economics, Oct, 2004 by William C. Dunkelberg, Jonathan A. Scott, William J. Dennis, Jr.

(12) The quarterly data are from the first monthly survey in each quarter. Monthly surveys in this period of time indicated a high of 22 percent for net plans to expand employment.

(13) The equation was Employment = 92745.6 4.3*GDP, [R.sup.2] = 96 percent.

(14) This was probably a significant factor in the statistical discrepancy in the National Income Accounts becoming exceptionally large in 2000 and 2001:1 indicating that measured income substantially exceeded measured output. The income measure grew faster than the output measure from 1997 to 2001:1.

(15) The percent of small business owners reporting higher average employee compensation peaked at 32 percent in 2000.

(16) The percent of owners reporting "the availability of qualified labor" as their number-one business problem hit a record high 24 percent in 2000.

REFERENCES

Bram, Jason and Sydney Ludvigson. 1998. "Does Consumer Confidence Forecast Household Expenditure? A Sentiment Index Horse Race" Federal Reserve Bank of New York Research Paper No. 9708. Printed in Economic Policy Review. June.

Cashell, Brian W. 2003. "Measures of Consumer Confidence: Are They Useful?" Congressional Research Service. Library of Congress. June.

Dennis, William J. Jr. and William C. Dunkelberg. 2000. "Small Business Economic Trends: A Quarter Century Longitudinal Data Base of Small Business Economic Activity." J.A. Katz ed. Data Bases for the Study of Entrepreneurship. New York: JAI Press.

Dunkelberg, William C. and Jonathan A. Scott. 1983. "Report on the Representativeness of the National Federation of Independent Business Sample of Small Firms in the United States." Office of Advocacy. U.S. Small Business Administration. Contract No. SBA2A-0084-01. Mimeo.

Howrey, Phillip. 2001. "The Predictive Power of the Index of Consumer Sentiment." Brookings Papers on Economic Activity. No. 1.

Popkin Joel and Company. 2003. Small Business During the Business Cycle. Office of Advocacy. U.S. Small Business Administration. Contract No. SBAHQ-01-R-0011.

William C. Dunkelberg is professor of economics at the School of Business and Management, Temple University, and chief economist of the National Federation of Independent Business. He is a nationally known authority on small business, entrepreneurship, consumer behavior and consumer credit, and government policy. Previously he was with Purdue, Stanford, and the University of Michigan. He is a fellow and past president of the National Association for Business Economics. He has a BA, MA, and Ph.D. degrees from the University of Michigan.

Jonathan A. Scott is associate professor of finance at the Fox School of Business and Management, Temple University. His research over the past 25 years has focused on small firm access to credit markets. He was published in the Journal of Financial Economics and other scholarly journals and has received numerous teaching awards. Previously he was with southern Methodist University and the Federal Home Loan Bank of Dallas. He received his BA from the University of Cincinnati and his Ph.D. from Purdue University.