Last weekend, in Redux: Household versus Establishment Surveys, we noted the silliness of trying to make the BLS Household Survey somehow superior to the Establishment Survey (NFP data).
Indeed, as the BLPS, Federal Reserve and Alan Greenspan have discussed, when measuring the same thing, it turns out there is almost no difference between them.
The spin has been that the Household Survey "captures an element of the economy not reflected in the payroll data: the entrepreneur." This is of course, nonsense. It is the worst kind of data mining, and if you ahve any doubts, just watch how silent the supporters of the household survey become when it falls below the Establishment Survey.
Regardless, Merrill Lynch’s economist David Rosenberg has an even more sharp tongued riposte:
"The argument that the household survey "better captures the
‘entrepreneurial spirit’ of America is a hoax of gargantuan variety," he writes
in a Tuesday report. In fact, says the economist, the jump in the household data
could reflect weakness in the economy. In the past three months, the household
survey has gained an average of 241,000 per month. Of those gains, an average of
145,000, or 60%, have come from workers aged 55 and above, according to Merrill
Lynch. Employment growth for workers under 55 has averaged 96,000 jobs a month
since March, below the average nonfarm payroll gains of 108,000.
Mr. Rosenberg writes that "individuals in [the older] cohort tend
not to be the drivers of the economy" and that their peak spending years are
well behind them. "[T]he fact that we are seeing the greatest employment growth,
in general, being recorded by the oldest population cohort is actually a
potentially troubling sign" that soon-to-be retirees are struggling financially,
writes the economist. "The underlying story is still one of lackluster
employment conditions." (emphasis added)
Let me remind you that Rosenberg is referring to in the underlined text above is nothing more than the Self employed, Work-at-home Contractor.
Sure, plenty of people legitimately work at home. But anytime I ever
knew anyone who was "looking for work," they invariably described
themselves as "self-employed/independent contractors / freelancers."
Jobs Report Redux
WSJ Marketbeat, July 11, 2006 1:31 p.m.