Photo: Bloomberg Television
EDITOR’S NOTE: Earlier today, we caught up with one of our favourite economists PIMCO’s Mohamed El-Erian. He brought up our recent post about how his suit and tie combos appeared to be correlated with good monthly jobs reports. After a fun exchange, he offered to write us this response. Enjoy!—————————————-
As I look ahead to my next TV commentary on the monthly employment report, I cannot help but be influenced by Business Insider’s monitoring and light-hearted discussion of my wardrobe choices. Indeed, BI has reported not only on what I wear but how my attire relates to whether the employment reports exceed or fall short of market expectations.
A few clarifications up front:
- I do not keep a tally of what I wear and when. As such, there is a calculable probability that over a period of time the same mix of suit/tie/shirt will coincide with a monthly TV appearance. (I have not done this probability calculation, and do not intend to, but I am happy to provide the underlying data — minus any particulars on waist and collar measurements — to BI if it wishes to undertake the task).
- Having said this, the BI report slipped slightly. A closer inspection of the photos in the latest blog post would discern subtle differences in shirt colour (light blue versus white) as well as tie (red versus burgundy). The suit was also a different one, albeit the same shade.
- I also do not engage in monthly forecasts of the employment report, preferring to leave this activity to Wall Street analysts and those TV commentators who choose to appear before the release of the employment report. As such, the last BI blog post gave me way too much credit in linking my choice of wardrobe to the outcome of the report.
- Further to the above point, admittedly I could have gotten dressed after the release of the report, since it comes out at 5:30 am California time. But, like many of my PIMCO colleagues, I am in the office before 5 am – and, barring a substantial coffee spill, I am averse to the notion of leaving the trade floor; and certainly not to ponder a different tie pattern or shirt colour.
So, was the BI report irrelevant? No.
It is true that fashion-conscious observers will find my clothing utterly boring. I tend to limit myself to rather standard combinations of suits/ties/shirts. And, despite encouragement from several colleagues, I am not keen to experiment with new or exotic patterns and colours.
Most importantly, and moving from light-hearted summer fun to a really serious point, it is also true that I care a great deal about the monthly employment report – both as an economist and as a parent of a nine-year-old. We all should.
Month after month, these reports speak to a persistent problem that risks getting more and more embedded in the structure of the economy. And remember, what is at stake here goes well beyond economics. There are important and consequential human, social and political dimensions.
If our politicians are not careful, the unemployment crisis will persist and, for the first time in a very long time, the next generation may be worse off than this one. And that is truly an awful prospect.