Media Ignores Massive September Employment Growth

The Bureau of Labor Statistics reported that the U.S. economy lost of 33,000 jobs in September according to its payroll survey, buts its household survey shows "Employed" went up by 906,000.  That's an astonishing number.  In general, the media are focusing on decline in company payrolls and ignoring the household survey.  Under the headline "U.S. Sheds Jobs on Hurricane Loss, but Unemployment Falls" the Wall Street Journal highlights the 33,000 jobs reportedly lost in September. The Labor Department Friday reported the first decline in U.S. nonfarm payrolls in seven years, suggesting the economy took a hit from hurricanes in Florida and Texas. The "economy took a hit" but "unemployment falls."  How does that happen?  Easier than you might think.  The Bureau of Labor Statistics measures employment using two surveys, the payroll survey and the household survey.  The payroll survey counts the number of people on company payrolls as reported by the companies.  In the household survey, a households are queried as to the number of people in the household and how many are employed.  The household survey is generally considered more accurate because it takes self-employment into account and other forms of employment that might not show up on company payrolls. So the Journal reported on the payroll survey for jobs numbers and on the household survey for the unemployment rate, but it said nothing about the jobs numbers as reported in the household survey.  The household survey numbers are strikingly at variance with the payroll survey numbers.  Take a look at the snapshot below taken from the Household Data in the BLS Employment Situation Summary Table.

The unemployment rate is calculated as the percentage of people considered to be in the civilian labor force who do not have paying jobs.  The civilian labor force number is a moving target because people who have given up looking for a job, even though they may be employable and not employed, are not considered to be in civilian labor force.  In September the civilian labor force grew by 575,000.  Some of this is attributed to workforce population growth of 205,000, but the larger number, 368,000, includes the number of people who have started looking for work again after having previously given up.  Scrolling down on the BLS Employment Situation page brings you to Frequently Asked Questions and this (boldface is mine): 1. Why are there two monthly measures of employment? The household survey and establishment survey both produce sample-based estimates of employment, and both have strengths and limitations. The establishment survey employment series has a smaller margin of error on the measurement of month-to-month change than the household survey because of its much larger sample size. An over-the-month employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 500,000. However, the household survey has a more expansive scope than the establishment survey because it includes self-employed workers whose businesses are unincorporated, unpaid family workers, agricultural workers, and private household workers, who are excluded by the establishment survey. The household survey also provides estimates of employment for demographic groups. For more information on the differences between the two surveys, please visit https://www.bls.gov/web/empsit/ces_cps_trends.htm. It's safe to say that 906,000 is a statistically significant change.  In order for the unemployment rate to go down, employment had to increase by more than 575,000, and it did.  It went up by an astonishing number.  Compare that to August where, if you do the arithmetic, the chart shows that "Employed" went down by 74,000. What might account for a statistically significant change in the household survey?  One factor could be the business climate under the business friendlier Trump administration.  Another could be consumer confidence and general confidence which has seems to have gone up since Trump took office.  Improvements in technology and internet services might also have had an impact by making it easier for people to launch home based businesses.  And finally, the reduction in federal regulations may be making the prospects of joining the ranks of the self-employed less and less daunting.  Whatever, 906,000 is an astounding number. What is not astonishing is the media's unwillingness to report it.  They just can't bear the thought of good news on Trump's watch.