NCPA - National Center for Policy Analysis

Reconciling Labor-Market Statistics

November 3, 1999

How fast is job growth in the U.S.? There are ways to measure it, using two different sets of official statistics kept by the federal government: by payroll employment and by a survey of households.

Both measures have tended to track together over time. But in the mid-1990s they began to diverge.

  • Payroll statistics show more than 1.5 million new jobs created since January.
  • But the household survey shows a mere 154,000 people added to job rolls since January.
  • Most experts favor the payroll survey since it is based on business records and relies on a larger sample -- but it counts jobs rather than people employed, so its numbers are inflated by people holding two or more jobs.
  • The household survey includes such groups as farm workers and the self-employed -- which the payroll statistics do not.

Experts say the payroll survey implies a far lower jobless rate than today's 4.2 percent.

But they also suspect that the household survey has been understating both job growth and labor-force growth in recent years because it misses increases in the population of illegal aliens.

A search for the answer continues.

Source: Gene Koretz, "Solving a Labor Market Enigma," Business Week, November 8, 1999.

 

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