US added 337,000 jobs last month

[Almighty Colin]

Originally posted by RawAlex@Nov 8 2004, 09:14 AM
Colin, then explain: Why do the monthly numbers for the last 4 years reflect huge job losses, not gains?

Are they measuring two different things?

Alex

It depends on which monthly numbers you look at.

The answer to your question is that there are two different surveys. You can find analysts/economists/pundits/partisans who will argue that one or the other is the better one to use. One survey is a household survey (the survey used for unemployment statistics) and the other is a payroll survey. The payroll survey shows a loss of jobs and the household survey shows a again. Both surveys are conducted by the US Department of Labor.

The major differences are:

1. The payroll survey is larger and on that basis should be less prone to fluctuation errors

2. The payroll survey does not include self-employment data and also under-reports employment by new companies.

3. The payroll survey can double count jobs when employees switch jobs leading to overcounting in some periods and under in others.

Where does the truth lie? Probably somewhere in between, I would guess. The household survey shows an increase of 800,000 self-employed the past 4 years. This isn't enough to offset the 2 million or so "jobs lost" from the payroll survey. On the other hand, even without the self-employment numbers the household survey shows an increase of nearly one million jobs for the period. The unemployment rate has risen and so even though the household survey shows a gain in jobs with or without the self-employed, job gains have not kept pace with population. And once again, the other side, the unemployment rate is still lower than the historical average making this an average to above average time for the US employment picture.