Monday, September 06, 2010

Reconciling the Household and Payroll Surveys of Employment

by Bill McBride on 9/06/2010 04:10:00 PM

Every month the BLS puts out a report that discusses the difference between the household and establishment surveys: Employment from the BLS household and payroll surveys: summary of recent trends

The Unemployment Rate comes from the Current Population Survey (CPS: commonly called the household survey), a monthly survey of about 60,000 households.

The jobs number comes from Current Employment Statistics (CES: payroll survey), a sample of approximately 390,000 business establishments nationwide.

These are very different surveys: the CPS gives the total number of employed (and unemployed including the alternative measures), and the CES gives the total number of positions (excluding some categories like the self-employed, and a person working two jobs counts as two positions).

The linked monthly report from the BLS discusses the differences, and adjusts the household survey to "an employment concept more similar to the payroll survey’s".

BSL Household and Payroll SurveysClick on graph for larger image in new window.

This graph from the BLS shows the household survey, the payroll survey and the adjusted household survey.

I was inspired to post this graph by Professor Nancy Folbre's post at Economix: Taking the ‘Un’ Out of Unemployment

A focus on employment, rather than unemployment, provides additional perspective. ...

The employment measure is unaffected by assumptions regarding the character, motives or incentives facing the unemployed.

And trends in this measure, as shown above, could discourage even the most optimistic among us, if they would just pay attention to it.

As Steven Hipple, a Bureau of Labor Statistics economist, puts it in a more detailed analysis of trends through the end of 2009, “Economic decision-makers might not understand the depth of the economic hole in the labor market.”
Little employment growth for a decade is quite a "hole".

Note: Over the same decade, according to the Census Bureau, the U.S. population, has increased from around 285 million to 310 million.

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