Many thanks to Kash for posting the good news on the payroll employment increase as well as very good commentary on the household survey numbers, such as the modest rise in the civilian labor force, as well as the fact that the employment-population ratio fell from 62.4% to 62.3%.
All that is left to add is my UTTER FRUSTRATION with a couple of CNN and NPR reporters who claimed that the rise in the unemployment rate was due to a strong increase in the civilian labor force. Odd, BLS is reporting that the participation rate held at 65.8 percent. Simply put, the increase in the civilian labor force barely kept pace with the increase in civilian adult population.
What did cause the rise in the officially reported unemployment rate was the 97,000 reduction in the household survey measure of employment. Now there are two ways to read the difference in the two surveys. By Lawrence Kudlow logic, self-employment fell by 360 thousand. I guess Lawrence must think that all of those 262 thousand new payroll jobs were from people leaving self-employment for a better paying position with a company. But of course, Lawrence’s logic is bogus with my preferred explanation being the usual noise in the series that Sec. Snow prefers to report but only during months when the household survey increase exceeds the payroll survey increase.
Maybe next month, payroll employment might rise another 250 thousand and the household survey could report a 600 thousand increase. After all, Sec. Snow needs to crow about something now that he is in the dog house for agreeing with Bill Clinton on Soc. Sec. add-on accounts. Which reminds me of another NPR reporter who said the Democrats have no new ideas but then called Snow’s suggestion that he took from Clinton a new idea. Maybe NPR thinks President Clinton was a Republican.
Update: Max Sawicky knows how to read a jobs report:
The unemployment rate is up, from 5.2 to 5.4 percent, because the household survey shows jobs down, labor force participation up.
And for a real laugh at a reading snafu by yours truly, check out the comments section.
Update 2: Lawrence Kudlow – aka the household survey measure is the more reliable – writes:
Friday’s payroll-jobs increase of 262,000 is yet another data-point arguing that the economy may actually be speeding up in the first half of 2005. Using a 12-month moving average of monthly job changes, nonfarm payrolls have increased to 200,000 through February 2005 from a decline of 150,000 going all the way back to January 2002.
No mention of the fall in the household survey measure of employment. Wonder if Larry writes the script for Treas. Sec. Snow?