I was floored to see this chart in a WSJ Op/Ed by Harvard Prof Robert Barro. It purports to argue (once again) for the household versus the payroll survey:
“The right-hand portions of the graphs show that household employment has risen by much more than payroll since 2001. From the end of the recession in November 2001 until January 2004, household increased by 2.2 million while payroll fell by 700,000. That is, household did better by 2.9 million jobs. Similarly, since the peak of payroll employment in March 2001, household employment has risen by 700,000, while payroll has fallen by 2.4 million, so that household did better by 3.1 million.”
However, a mere glance at the chart shows that job creation was booming throughout the 90s, and ground to a halt starting around 2001:
Note the tall bars are Recoveries since 1949; The shorter bars reflect the present recovery.
One can hardly look at that chart as a ringing endorsement of the job creation during the past 3 years versus the prior 10. I that Barro was trying to help the President with the tired and discredited Household Survey argument.
Geez, with friends like the that, the Prez doesn’t need enemies . . .
Regardless, when one considers historical post recession job creation — using either Payroll or the Household survey — its apparent that the economy at present is vastly underperforming prior post War expansions.
Source: The Economic Policy Institute
Household surveys are on left, Payroll surveys are on the right
Source:
Go Figure
ROBERT BARRO
WSJ, March 9, 2004
http://online.wsj.com/article/0,,SB107879524452349931,00.html
Mr. Barro is a professor of economics at Harvard and a fellow of the Hoover Institution.
The Jobs Picture
March 5, 2004
The Economic Policy Institute
http://www.epinet.org/content.cfm/webfeatures_econindicators_jobspict
“I that Barro was trying to help the President with the tired and discredited Household Survey argument.”
I was wondering if you can point out for me how the Household Survey has been discredited.
1) Fed Chief Alan Greenspan testified that the Payroll survey was much more accurate and reliable than the Household survey;
“We have concluded that the data on so-called payrolls survey is surely the most accurate of the two and our suspicion is that at the end of the day there will be revisions to the household data,” Greenspan said in response to a question from the House of Representatives Budget Committee. The Fed chief said recent official estimates of immigration are likely “grossly overestimated”, which in turn overestimates employment growth as measured by the household survey.
http://www.forbes.com/markets/newswire/2004/02/25/rtr1275316.html
2) BLS March 5 release: When the Household survey is “modified to make it more “similar in concept and definition” to the payroll survey,” divergement disappears. See the charts here: http://bigpicture.typepad.com/comments/2004/03/bls_on_payroll_.html
The BLS did this by subtracting from the Household Survey:
1) Total agriculture and related employment;
2) Self-employed, unpaid family and private household workers (nonagriculture);
3) Workers absent without pay from their jobs.
BLS then added back in nonagriculture wage and salary multiple job holders.
The use of the broader standard (including farm and unpaid family workers) is what apparently created the divergement, as shown by the Green lines. Using data “similar in concept and definition” to the Payroll Survey “magically” eliminates the phantom missing jobs
See: BLS on Payroll vs. Household Survey
http://bigpicture.typepad.com/comments/2004/03/bls_on_payroll_.html