Jobs Report Redux

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
Scott Patterson
WSJ Marketbeat, July 11, 2006 1:31 p.m.

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What's been said:

Discussions found on the web:
  1. babycondor commented on Jul 12

    The Baby Boom generation has driven the U.S. economy since 1950, and it will continue to do so, creating novel trends in its wake as ever.

    The traditional concepts of “employment” and “retirement” are changing. This generation will work longer, spend longer, live longer, and redefine paradigms throughout their lives. You cannot extrapolate from the past to predict the future.

    Rather than concluding that older people are working because they’re struggling financially, why not interpret it that they’re working to support lifestyles they are accustomed to, and see no reason to abandon?

    I and many of my “cohort” have simply not bought in to the lifetime career and “retirement” models foisted on us by the media. As long as the numbers generators continue to focus on outdated definitions and metrics, their prognostications will be off.


  2. jrg commented on Jul 12

    Very well said, and I agree!
    (and I know a fair number of people who would fall within this category)

  3. M.Z. Forrest commented on Jul 12

    The obsession of some with the baby boomers, I really don’t get. Have they been useful in establishing trendlines at certain times? Certainly, but really not more so than any other generation. A micro case can be made on any generation, and if you make a micro bet, you can benefit from that knowledge. At the macro level, your typical boomer analysis breaks down.

    This is not to say that such analysis isn’t worthwhile. For instance, there is a notable difference between the children of the Great Depression who have begun dying and the baby boomers. Needless to say there are two different worldviews there in regards to debt and savings. It makes a cynic makes me think that your typical boomer will be broke in a decade and a half.

  4. Guy commented on Jul 14

    I’m not sure that the older workers in the Household Survey are struggling financially as Rosenberg suggests, but I don’t think they represent a wellspring of entrepreneurial activity, either.

    The size of the baby boomer generation in relation to the rest of the population might be skewing the data.

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