Sun, Aug 08, 2004 - Page 10 News List

US jobs disappoint, though data differ

EMPLOYMENT Partisan politicians can make a lot of hay by focusing on the set of numbers that seems to best reflect a convenient view of economic growth

NY TIMES NEWS SERVICE , NEW YORK

Last month was a poor month for job creation in the US.

Last month was an excellent month for job creation in the US.

That tale of two employment reports is true, and it continues a trend that has persisted for two and a half years. The discrepancies have made it possible for Republicans to herald a job recovery and for Democrats to deny one exists.

Both sets of statistics were issued by the government's Bureau of Labor Statistics, but they come from very different surveys. One, the establishment survey, which questions 160,000 employers, paints the bleak picture. The other, the household survey, which questions 60,000 people about whether they or other family members are working, paints the better picture.

Volatile

Which is right? Because of its smaller sample size, the household survey is always more volatile, and month-to-month changes can be deceptive for that reason. So economists normally pay more attention to the establishment survey. But the fact that they differ so drastically may mean that reality lies somewhere in between.

Overall, the household survey now shows that employment has risen by 1.9 million jobs, or 1.4 percent, since US President George W. Bush took office, while the establishment survey shows employment is down by 1.1 million jobs, or 0.8 percent.

The establishment survey concluded that last month was a poor month, with a seasonally adjusted job growth of just 32,000 jobs, far below the number that economists were expecting.

On a nonseasonally adjusted basis, the performance was even worse. It showed that there were 1.2 million fewer people working in the US last month than in June. The adjustment in part reflects seasonal workers who are not paid for the summer, such as some school employees.

Household survey

* The US Bureau of Labor Statistics survey of households gathers information from 60,000 individuals

* The survey of households might count as employed people who only work part of the year

* The survey of households shows that employment has risen by 1.9 million jobs, or 1.4 percent, since George W. Bush took office

* Since early 2002, the household survey has shown a steady increase in jobs

Source: NY Times News Service


The household survey, on a seasonally adjusted basis, showed a gain of 629,000 jobs last month. Before seasonal adjustment, the gain was an even larger 839,000 jobs. That may partly reflect the fact there are more agricultural jobs in the summer -- which are included in the household survey but not in the establishment one -- or that some workers who have the summer off would normally say they had jobs although they had not worked last month.

The household survey is used to calculate the unemployment rate, which fell to 5.5 percent last month, the lowest figure since October 2001.

The two surveys are not intended to produce the same results.

The household survey includes the self-employed as well as agricultural workers, who would not be counted in the establishment survey, and the establishment survey counts each job so that a worker with two jobs could be counted twice.

But over time the two surveys have been roughly similar, although with an interesting political difference. Republican administrations tend to produce better household numbers than establishment ones -- perhaps reflecting a better environment for the self-employed. Democratic administrations tend to show better establishment figures.

Divergence

Early in the Bush administration, which took office just as the economy was sliding into a recession after a period of prolonged growth that saw unemployment sink to historically low levels, both surveys showed a shrinking work force. But they began to diverge in early 2002, with the household survey finding steady job gains, while the establishment survey continued to show a shrinking number of people with jobs.

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