Examining the Discrepancy Between Jobs and Employment

-edited

In the past year, the BLS says the number of jobs rose by 2.62 million. Employment rose by 1.429 million.

The discrepancy between the increase in jobs and the increase in employment is 1,191,000. On average, over the past year, that's a discrepancy of 99,250 every month, in favor of jobs.

Household Survey vs. Payroll Survey

The payroll survey (sometimes called the establishment survey) is the headline jobs number, generally released the first Friday of every month. It is based on employer reporting.

The household survey is a phone survey conducted by the BLS. It measures unemployment and many other factors.

Numbers in Perspective

  • In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
  • If you don’t have a job and fail to look for one, you are not considered unemployed, rather, you drop out of the labor force. Searching want-ads or looking online for jobs does not count. You need to submit a resume or talk to a prospective employer or agency.
  • In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
  • In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.

These distortions and discrepancies artificially lower the unemployment rate, artificially boost full-time employment, and artificially increase the payroll jobs report every month.

Nonfarm Payrolls vs Employment

Over time, the numbers move in sync. There is no clear pattern around recessions. In many years the levels converge before a recession, but ahead of the great recession the numbers diverged.

Nonfarm Payrolls vs Employment Detail

In December of 2009 the difference between payrolls and employment was 8.21 million. This month, the difference is 5.56 million.

Since the lows in December of 2009, the BLS tells us employment rose by 18,632,000. The number of jobs rose by 21,291,000. That's a difference of 2,659,000.

In the past year alone, the difference between jobs and employment is a whopping 1,191,000. That's a discrepancy of 99,250 every month, in favor of jobs.

I strongly suggest double-counting of jobs by the BLS when people take extra part-time jobs or shift jobs.

For a closer look at today's jobs report please see Jobs +263,000 vs. Employment -103,000: Unemployment Rate 3.6% Lowest Since 1969.

Mike "Mish" Shedlock

Comments (15)
No. 1-9
Realist
Realist

Thanks for the analysis Mish. Though it’s highly likely that employment numbers are somewhat overstated, what is clear is that employment (like the economy) has been growing slow and steady now for 10 years. You can quibble about the numbers, but the trend remains.

Jojo
Jojo

You ought to go on TV because all I keep hearing from the talking heads is "LOWEST UNEMPLOYMENT NUMBER IN A GENERATION!".

So why are housing sales cratering? Why are people living in RV's and tents everywhere you look? Why are so many people with new cars aspiring to be glorified tax drivers, sporting Uber/Lyft signs in their car windows? I must see hundreds of these drivers in a typical week!

lol
lol

Entire decade of (simulated) job growth,could we possibly see wait for it...…….one trillion (with a T)straight months of (simulated)job growth,a negative print unemployment "rate",one million straight quarters of a positive GDP "rate"and it only costs a few tril a year in red ink.

Casual_Observer
Casual_Observer

Has anyone looked at the labor participation rate ? They are just bouncing off lows since the great recession. They were in.the high 60s during the.80s and 90s. Now it's in the low 60s. I suspect over time this number goes lower yet as the.demographics change. At some point there will be no getting away from many truths about the labor markets.

Six000mileyear
Six000mileyear

The fact that MISH has pointed out how easy it would be to eliminate double (triple) counting jobs means the government wants this distortion.