Economist: Unemployment drop ‘implausible … a statistical quirk’
Read the whole thing at link below.
This report is a tale of two labor markets. The establishment survey payrolls painted a picture of moderately growing employment over the last three months but at a marginally slower pace than over the last year. At this pace of job creation, the unemployment rate should be barely drifting lower given underlying demographic trends. In contrast, the household survey painted a picture of a sharply falling unemployment rate—down 1.2% points over the last 12 months. Such a rapid decline in the unemployment rate would be consistent with 4%–5% real economic growth historically but much of the decline is accounted for by people dropping out of the labor force over the last year the employment-population ratio has risen to only 58.7% from 58.4%.
via Economist: AEIdeas.
It’s really worthwhile drilling down into the numbers.
Here’s something most people don’t understand.
The unemployment rate is derived from the household survey.
The net jobs created is derived from the payrolls survey.
So the household survey says 873,000 new jobs, of which 582,000 were part-time positions.
And the payroll survey says 114,000 net new jobs.
How do you square these numbers? You can’t. There’s a statistical anomaly or two somewhere.
The only real question here: feature or bug?