1. Project 1 2009

2. Average Weekly Hours, Manufacturing

8. Prewhitening

12. Identification of DAWHMAN Histogram Correlogram Unit root Test

16. Model: Conjecture and Estimation

17. Estimation excluding last 12 months of data

21. MorganHansenar(1)ar(4)ma(3)ma(4).289 JeffLeear(3)ma(1)ma(9).291 JuliannShanar(1)ar(3)ar(4)ma(9).287 DanHellingar(1)ar(3)ma(4)ma(9).288 MattMullensar(3)ma(1)ma(3)ma(9).288 ChrisStroudma(1)ma(3)ma(9).288 BrooksAllenar(3)ma(1)ma(3)ma(9).288

24. Forecast for last 12 months of data

25. Initial Condition, recoloring

26. Recolored Within Sample Forecast

27. Estimation for Full Period

29. Model Validation Actual, fitted and residual dawhman Correlogram of residual Histogram of residual Serial correlation test

34. Forecast for Remainder of 2009

37. Forecast of Month to Month Change

38. Initial condition

42. Lessons No single “correct” model, many “correct” Use show command to embellish view of the forecast Estimate at the prewhitened level. Illustrate at the cognitive level, i.e. recolor Value of forecasts: Observing what you do not expect!

43. As Bernanke Says: “The economy will be slow to recover”