One last item:
"The Labor Department’s payrolls report is also at odds with its own survey of households, which is used to calculate the unemployment rate. The household survey showed employment grew by 387,000 in June, in line with ADP’s figures.
The enormous disparity of recent months coupled with the ADP data supporting the household-data implications raises important questions about the reliability of all three employment counts,” said David Resler, chief economist at Nomura Securities International in New York." –Bloomberg
Umm, no — that’s simply incorrect (and Bloomberg and Nomura Securities ought to know better).
For the record: The Labor Department’s Establishment Survey (aka NonFarm Payroll report) number of 121k WAS NOT AT ODDS with its own Household Survey of 387k. These two reports measure two very different things. The numbers can be off by a few 100k — and still be consistent with each other.
As we have discussed all too many times, the Household survey measures:
– Agriculture and related employment;
– Uncompensated Workers;
– Unpaid Family Employees;
– Part Time Workers;
– Workers absent without pay from their jobs;
– Self employed, Work-at-home Contractors;
— none of which are counted in the Establishment (Non-Farm Payroll) Survey.
In fact, the BLS specifically looked at and compared the two data series back in 2004. Once they made an adjustment so both surveys were counting the same thing, the huge gap disappeared.
I seriously challenge the expertise of any economist that fails to recognize the different data series.
This is something I would hope that mainstream economic reporters would understand — even if they are not economists (i.e., Bloomberg!). Any reporter that dutifully repeats this tripe has been punk’d. If this is your beat, and you are not familiar with these two survey methodologies, than you better get up to speed quickly. Especially if you are going to get dissed by some economist trying to cover his tracks on
a regular basis.
Here are the graphs from the BLS report:
click for larger graphics
Note: This isn’t a new development — these are from 2004.
ADP Job Survey Loses Luster Among Economists After June Miss
Bloomberg, July 7, 2006 15:09 EDT
BLS on Payroll vs. Household Survey
The Big Picture, March 14, 2004