Where did the 759,000 Mystery Jobs Come From?
MacIver News Service | Octover 5, 2012
Some observers were baffled Friday by the feds’ latest jobs report. The news release from the Bureau of Labor Statistics stated 873,000 more people found jobs in September, while only 114,000 more jobs were created.
These two figures were produced from two different surveys. The Census Bureau conducts a monthly “household survey” and arrived at the 873,000 increase in employed workers. (That’s 418,000 new workers plus 456,000 who are no longer unemployed.)
The Bureau of Labor Statistics conducts the “establishment survey” of employers and arrived at the 114,000 increase in jobs.
The new unemployment rate is 7.8 percent, a .3 percent drop from August. That rate is determined from the results of the household survey.
A BLS spokesman told the MacIver News Service there has been no recent changes in the methodology of either survey, and that the large discrepancy between the two figures is no cause for alarm.
“It’s common,” he said. “In any one period they can go in different directions, but over a long period of time, the two surveys will say the same thing.”
The spokesman said that’s why BLS focuses on longterm statistics and not monthly snapshots.
According to the Bureau’s Friday release, there was a significant revision to the July and August job creation numbers. In July the total nonfarm payroll employment increased from 141,000 to 181,000, and in August from 96,000 to 142,000. That comes out to a 28.4 percent change for July and 48 percent for August.
CNBC provided a further breakdown of the numbers:
But the underlying details told a less buoyant story: The closely watched U-6 rate, which takes into account the underemployed and those who have quit looking for work, held at 14.7 percent. Had the participation rate not dropped as much as it has over the past three years, the more-publicized U-3 unemployment rate actually would be 9.8 percent, according to University of Maryland economist Peter Morici.
At the same time, the number of unemployed for 27 weeks or more fell below 5 million for the first time since July 2009. But the average duration of joblessness rose to 39.8 weeks, its highest since June and still near the all-time peak of 40.9 weeks set in November 2011.