PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Two Different Jobs Reports for April

By at 4 May, 2019, 8:47 am

by Raymond J. Keating-

Given the way that jobs numbers are reported by the media and talked about by politicians early each month, it would be easy to think that the Bureau of Labor Statistics “Employment Situation” report is one unified report. But that is not the case.

In reality, what the BLS offers each month are two sets of data released in one report. There is the establishment survey, which presents the widely quoted payroll data, and then there is the household survey, which serves up the rest of the key data that people look at each month, including the unemployment rate.

Eventually, the household and establishment surveys sync up over time, but on occasion in certain months, the two surveys can tell very different jobs stories. That is strikingly the case in the just-released April jobs report.

Establishment Survey: Good News

In April, the establishment survey served as the “good news” jobs report. It noted that nonfarm payroll employment grew by 263,000. That’s a very solid expansion in jobs. It’s also a nice bounce back from a poor February report and a middling March gain.

Household Survey: Not So Good 

And what about the completely separate household survey? Well, at first, it would seem to match the good news of the establishment survey. After all, the unemployment rate in April dropped to 3.6 percent, down from 3.8 percent in march, and the lowest rate since December 1969.

Nice, right? Indeed, what’s not to like?

Well, when it comes to the unemployment rate, you always have to crawl inside the data. And when you do that, the household survey jobs data for April look ugly.

First, the labor force dropped by 490,000. Second, employment actually fell by 103,000. So, while the number of unemployed declined by 387,000 and the unemployment rate fell, that was all about people leaving the labor force, not about job gains.

Self-Employment Down

For good measure, the monthly household survey also serves up the latest data on self-employment. The state of entrepreneurship remains an area of concern, with the portion of entrepreneurship represented by the self-employed numbers struggling since the Great Recession. Unfortunately, in April, the number of unincorporated self-employed (seasonally-adjusted) declined for the fourth month in a row.

Meanwhile, the data for incorporated self-employed is not seasonally adjusted, so we are left to compare the latest numbers to the same time in previous years. Fortunately, the April level of incorporated self-employed was up from April 2018, and it registered as the highest April level going to back to the start of the dataset in 2000.

If we combine unadjusted incorporated and unincorporated self-employed, though, total self-employment was down in April 2019 (15.234 million) compared to April 2018 (15.585 million).

So, April was striking in that it served two strikingly different jobs report. Let’s hope that in the coming months, the positives in the establishment survey win out over the problems seen in the household survey.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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