I won the office pool1 on the monthly jobs number again today—it was 192,000—and I’m on track to win the March Madness pool2. Naturally there’s great interest in how I have managed this3 considering that I’m neither an economist nor a sports fan. I’m tempted to keep my secrets to myself, but in the name of journalism I’m sharing them for the first time here with you. But first, let’s deal with those footnotes.
1 The office pool is me and one other person I’m not at liberty to name. Well, OK, it’s Matthew Philips in our Washington bureau. And it’s not technically a pool because no money is involved. But bragging rights are worth far more than cash. (Aren’t they, Mr. Philips?)
2 I’m not technically in a March Madness pool, either, but I have a foolproof strategy for winning that I will reveal after subjecting you to the explanation of my Jobs Friday techniques.
3 I have to assume there’s great interest. Technically no one has asked.
The main secret to correctly predicting the monthly change in nonfarm payrolls, which is announced the first Friday of each month, is to ignore economics. Philips keeps getting this wrong, wasting his time puzzling over arcana such as weather effects and the predictive power of the ADP National Employment Report. I just look up the consensus in Bloomberg’s survey of economists, and that’s my number. Safety in the herd—a strategy as old as the antelope.
Second, make the other person guess first. That way you can pounce on any error. If the person guesses unreasonably low, pick a number just 1,000 higher, which covers you not only for that level but everything else above it. I beat Matt once or twice doing this.
This strategy also works if your “pool” is actually a pool, with a large number of players. Wait until everyone else goes and then pick a number that’s either higher or lower than everyone else’s. You will probably be wrong, since this is the exact opposite of the herd-safety principle, but at least you’re giving yourself a chance, since you own all of the long tail at one end of the bell curve, whether it’s the over or the under.
This month I gave myself an extra margin of safety to ensure a win. Matt made me pick first this time, having wised up. I picked 190,000 (accidentally using the wrong number for the consensus), but I specified “plus or minus 200,000.” That way I would win in the case of anything from a 10,000 decline to a 390,000 gain. Matt was so demoralized he didn’t even come back with his own bet. Today, in a gracious note that was not meant for public consumption (hah), he wrote: “I’ll admit, you nailed it.” Victory is sweet.
Now, about that foolproof, two-part March Madness strategy:
• Don’t contribute your ante to the pot until afterward in case you don’t win.
• Reveal your picks after the tournament is over.
I did this last year and miraculously got every game right. I even had the correct scores. There was some kind of disagreement with the person in charge last year that prevented me from collecting my winnings, but I’m pretty sure I have ironed that out now. Perfect bracket, thank you very much. Now give me the cash.