You might call the January jobs reports released this morning A Tale of Two Surveys. First, there’s what's called the establishment survey, where businesses are asked how many jobs they created. Last month? Just 113,000 of 'em.
Not so good.
And then there's the household survey, where households are asked how many people are working. That one showed more than 600,000 new jobs last month, and helped kick the unemployment rate down to 6.6 percent. So which to believe?
Well, if conflicting employment reports stress you out, close your eyes and imagine the beach.
Doug Handler is chief U.S. economist for IHS Global Insight. He says the survey where tens of thousands of households reported that nice bump in employment is less precise than the payroll data.
"It’s like trying to predict the amount of water in the ocean by looking at the waves here,” he says. “You can broadly get a number, but from minute to minute or from month to month it’s tough to predict."
Plus, the household survey and the payroll tabulation measure slightly different things. Harry Holzer is an economist and public policy professor at Georgetown University.
"The self-employed in the household survey will say that they are employed, and there’s no such category in the payroll numbers, cause it’s only for employees," he says.
While many economists prefer the payroll survey, they say there’s something to the optimism in the household survey. That it should temper the gloom of the last two payroll reports. (December’s weak report was revised upwards to just 75,000 new jobs.)
Mark Vitner is managing director and senior economist at Wells Fargo. He knows folks were disappointed when they first saw today’s numbers.
"They said, well, the unemployment rate’s been declining but it’s been declining and it’s all because of a drop in the labor force,” he says. “Well, the labor force didn’t decline, it actually increased."
He says low job gains in December and January may have been caused by weather. And he says those disappointing payroll numbers may not look so disappointing if you see where the growth took place. Construction and manufacturing jobs are actually picking up, which he thinks is pulling people back into the labor force.