Thursday, June 04, 2015

Public and Private Employment Data

by Bill McBride on 6/04/2015 02:19:00 PM

Some readers have wondered about the accuracy of the monthly BLS employment report. The report is based on a survey of households, and reports from businesses - for differences see: Household vs. Establishment Series - and the establishment report is benchmarked annually to state unemployment insurance tax reports.

On a monthly basis, the establishment report may have a large margin of error, but - with the annual benchmarks - the report should track payroll employment very well over time.

Another public source of employment related data is the initial and continuing weekly unemployment reports.  The initial weekly unemployment claims report shows unemployment claims are near all time lows.

The good news is private sources of employment data are suggesting similar gains in employment (for those who doubt the accuracy of government data).

The most followed private source is from ADP.  However, ADP makes some adjustment based on data from the BLS report and from the Philadelphia Federal Reserve’s Aruoba-Diebold-Scotti Business Conditions Index. So this isn't entirely independent series.

Another private source is the ISM surveys of manufacturing and non-manufacturing companies.   Although these surveys are based on the number of companies hiring (or laying off workers), the index has tracked changes in private BLS employment over time.

For small business, the Intuit index is very useful - and the NFIB monthly surveys also provides information on hiring.  From NFIB: Small Business Hiring Strong for 5th Consecutive Month

“May continued to show solid, but not spectacular hiring, continuing the trend of previous months in 2015. For the second time this year, a high of 29 percent had openings they couldn’t fill; a high we hadn’t seen since April 2006. This is a strong indication that the unemployment rate will decline further.

“Small employers are starting to feel the economy picking up and they are working hard to meet this demand."
Other sources of private data include:
TrimTabs (based on analysis of daily income tax deposits)

• The Conference Board's labor differential (a spread between the share of households reporting jobs are plentiful versus hard to get).

• The Chicago PMI (a regional survey).

• The Challenger, Gray & Christmas report on planned layoffs. From Reuters today: US job cuts plunged 33% to 41,034 in May: Challenger
Job cuts announced by U.S.-based companies declined sharply in May as the energy sector took another pause following successive rounds of big payroll reductions.

Employers laid off 33 percent fewer workers in May from the previous month, global outsourcing firm Challenger, Gray & Christmas reported Thursday. Companies announced 41,034 cuts in the last four weeks, compared with 61,582 in April.
There are other sources too. The bottom line is all of the data - both private and public - is telling a similar story on employment.