PrintPaul Krugman explains it for you:
A confusing employment report this morning: employment down, but unemployment also down. Nor is this a story about workers dropping out of the labor force; the report shows an increase in the employment-population ratio, the percentage of adults who are working. What?
OK, the trick is that there are two different surveys. Payroll numbers come from a survey of firms; unemployment (and employment-population) numbers come from a survey of households. Both surveys are subject to error, both strict statistical sampling error and things like incomplete coverage, uncertain seasonal adjustments, and so on. When employment growth is near zero, on either side, it’s not that surprising that the surveys should point in opposite directions.
The bottom line is that economic numbers are no more than rough indicators. You have been warned.
COMMENTS (4)
Alternately, when employment growth is near zero, it's also possible that the number of people removed from the labor force by alien abduction, UN black helicopters, secret Chinese occupation forces, and government reeducation camps becomes detectable in the gap between the two numbers. You have been warned.
Alternately, when employment growth is near zero, it's also possible that the number of people removed from the labor force by alien abduction, UN black helicopters, secret Chinese occupation forces, and government reeducation camps becomes detectable in the gap between the two numbers. You have been warned.
pshaw Rhubarbs, warning? I, for one, welcome our Alien, Chinese, UN overseers re-educating us.
pshaw Rhubarbs, warning? I, for one, welcome our Alien, Chinese, UN overseers re-educating us.
It seems to me that the Social Security Admin would have a more accurate employment figure. When you lose your job you stop paying ss and when you get one you start/restart paying it. Not only would we get job numbers but we'd get info on wages. I.e. you lost that $120K job writing software but you got that job as a part-time Walmart greeter because you didn't realize that unemployment pays more, but you are screwed now because they take your last job as a reference.
That we don't use this information makes me thing that one of 3 thing is happening;
1. There is some law that doesn't allow the information to be used this way.
2. It's a conspiracy that no one really wants accurate jo ... view full comment
It seems to me that the Social Security Admin would have a more accurate employment figure. When you lose your job you stop paying ss and when you get one you start/restart paying it. Not only would we get job numbers but we'd get info on wages. I.e. you lost that $120K job writing software but you got that job as a part-time Walmart greeter because you didn't realize that unemployment pays more, but you are screwed now because they take your last job as a reference.
That we don't use this information makes me thing that one of 3 thing is happening;
1. There is some law that doesn't allow the information to be used this way.
2. It's a conspiracy that no one really wants accurate jobs information.
3. I don't know what I am talking about.
I hope it's #1 but I suspect it's #3.
Dirk
dirque, the information you want is only reported to the SSA annually. It would not be useful to monitor employment. Even the amount of tax remittances is not that useful because the number of employees it represents cannot be determined from the gross amount. Even the gross payroll cannot be inferred unless all employers split out the Medicare portion which they do not. I am sure the DOL/BLS economists to look at these numbers as a check on the other employment figures they get.
dirque, the information you want is only reported to the SSA annually. It would not be useful to monitor employment. Even the amount of tax remittances is not that useful because the number of employees it represents cannot be determined from the gross amount. Even the gross payroll cannot be inferred unless all employers split out the Medicare portion which they do not. I am sure the DOL/BLS economists to look at these numbers as a check on the other employment figures they get.