This Friday sees the monthly release of non-farm payroll data. The consensus is for an increase of 175,000 jobs.

Wachovia are forecasting an increase of 110,000. Clearly, a virulent strain of pessimism has hit the firm given the inaccuracy of their recent previous calls. But if it's broke, try to fix it.

Perhaps this is an appropriate time to re-introduce all forecasters to Sod's Law. In this context it states that Wachovia, having called much too high several times in sequence and then adjusted the model severely downwards to compensate, will now see Friday's non-farm payrolls number come in much stronger than even the 175,000 consensus. Thus validating their previous approach. Or so it may seem.

Helpfully, British Gas Plc (an energy supplier, not a national characteristic) have spent shareholders money commissioning the development of a formula for Sod's Law. The firm's Board having decided wisely they cannot invest the cash more profitably. Here's the result:

((U+C+I) x (10-S))/20 x A x 1/(1-sin(F/10))

where:

U=Urgency
C=Complexity
I=Importance
S=Skill
A=Aggravation (a constant 0.7)
F=Frequency

Excel was rolled out to apply the formula to the concept of persistently successful economic forecasting. Despite using reasonable sensitivities, the results were not promising.

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