Thursday, July 01, 2010

Employment Report: Which payroll number to use?

by Bill McBride on 7/01/2010 09:56:00 PM

Reading some of the employment preview articles tonight, I can see there will be some confusion just like last month. In May there were three payroll numbers commonly reported:

  • The headline number: +431,000 payroll jobs.

  • The headline number minus temporary Census workers (ex-Census): +20,000 payroll jobs.

  • Private sector hiring only. Some reports substituted private sector hiring for the headline number to remove the impact of the temporary Census workers: +41,000 payroll jobs.

    This created some confusion because I reported the underlying trend as +20,000 ex-Census, and many other reports used the private sector hiring of +41,000.

    All three numbers have meaning, but the number consistent with previous reports (after removing temporary Census workers) was +20,000.

    Tomorrow some sites will report private sector payroll jobs only - and that is not the correct method to remove the temporary Census workers and is inconsistent with previous reports (unless they were reporting private sector jobs only). Government hiring counts, especially since state and local governments might be cutting back later this year.

    I will use the headline number and adjust by the number of temporary Census hires (the number will be reported here).