Jobs Report: No Need to Panic

Floyd Norris reconciles the seemingly contradictory data provided in recent jobs reports.

“The discrepancy can be traced to the fact that the [establishment survey and the household survey] are different in concept, and often different in result.”

“The household survey is based on calls to households, asking who in the household was working during a particular week in the month. [It considers multiple part-time jobs as one job.] It is much more volatile than the other survey, and is (almost) never revised.”

“The establishment survey is based on information from employers, and is heavily revised.”

“The figures [from the two surveys] should not be identical, because they include different things, but they should be close.”

“The household survey is used for the unemployment rate, and for such statistics as the employment-to-population ratio. Until recently, that survey was lagging the other one in job creation, and reported a steady fall in the employment ratio.”

“In any case, the employment-to-population ratio rose during January and is now at its highest level in more than a year.”

“In other words, those who are depressed by the latest job figures may be overreacting.”

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