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« Bush on Meet the Press | Main | The Thinkers » February 9, 2004How Many Jobs?The annual Economic Report of the President is out, and it includes a lengthy examination of the divergent job stats from two government surveys - the employer survey and the household survey, an issued I've discussed here and here before. Here's a brief excerpt of the section, which starts on page 49 of the 417-page document. For the first time in the two series' histories, one showed a large and sustained decrease in employment while the other showed a large and sustained increase. In particular, the establishment survey reported a decline in employment of over 1.0 million from the end of the recession in November 2001 to August 2003, while the household survey reported an increase of over 1.4 million. In every month of 2003, the establishment survey showed employment below the November 2001 level, while the household survey showed it above this level. Such a sustained string of divergence is unprecedented. One possible explanation is that the establishment survey misses some new firms and therefore may underestimate employment at the start of an economic expansion. Past revisions to the establishment survey offer some support for this theory.The employer survey - which focuses on large employers - shows a loss of a few million jobs in recent years, while the household survey, which picks up self-employed people, independent contractors, and people working at new and small start-up businesses, shows a gain of a few million jobs. I suspect that if the household survey is more right than wrong, President Bush will win reelection in a landslide. Posted in Economy & Business
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Bill - In a well-informed, rational world I would agree. But the 1992 election showed the Americans think the economy is weak if they keep hearing that OTHERS are out of work. Somebody's gotta get those self-employed numbers into the media coverage of this economy. Posted by: Tonto at February 9, 2004 03:45 PMI agree with you wholeheartedly about that. What I was saying was that if there are 3 million more people working than the employer survey suggests, that is 3 million self-employed people and people working at small start-up businesses who are perhaps more likely to think well of the economy and, therefore, of Bush. Posted by: Bill Hobbs at February 9, 2004 04:30 PMTonto - I have the same fear. But I think if payrolls show positive growth over the next 9 months, the unemployment rate continues to tick down, and the market continues to do well I don't think the economy will be an issue against Bush Posted by: AWW at February 9, 2004 10:22 PMWhile the discrepancy between the household and payroll survey is interesting, relying on it concretely as a missing link would be a mistake. You can't compare apples and oranges. The methods are different, as you well know. Someone that has only worked an hour in the survey week is still counted as employed in the household data. Further, the household survey asks if people are self-employed or not, so there's really no mystery about that. According to the household survey, self-employed workers (agricultural and nonagricultural) as a share of employed workers (agricultural and nonagricultural) has not changed significantly. Self-employment (agricultural and nonagricultural) as a share of total employment: Year Annual That's not to say there isn't still more to be learned from the comparison of the household/payroll surveys, but I don't think this is the magic bullet you're looking for. In my opinion, the discrepancy seems easily explained by being two completely different sampling methods. When you ask an employer about jobs, they either exist or they don't, and they are generally 40-hr-week salaried jobs. With the payroll survey, you're asking a person, and a slew of other factors come into play, including the fact that even the smallest amount of work counts as employment. Posted by: Chris Wage at February 10, 2004 10:07 AMWith the payroll survey, you're asking a person, and a slew of other factors come into play, including the fact that even the smallest amount of work counts as employment. Er, household survey, rather. Posted by: Chris Wage at February 10, 2004 11:47 AM"In my opinion, the discrepancy seems easily explained by being two completely different sampling methods." But how does that explain: "Such a sustained string of divergence is unprecedented"? Something's going on that isn't being identified. Posted by: Syl at February 10, 2004 04:09 PMDoes the Payroll Survey take into account contractors? Last time I checked, it didn't... I've heard vague stuff about it also being X amount of time behind actual hire numbers and stuff too. Posted by: Dave Belisaurius at February 11, 2004 12:13 PMPost a comment
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