Two US Employment Surveys, Two Different Results

Two employment surveys were released recently and one says job growth has increased in the United States while the other states that unemployment levels in the country have spiked. Around 163,000 jobs were created last month. However, unemployment in the United States rose to 8.3 percent.

The question that begins to be asked is “Why is the unemployment rate still high when the number of jobs increased last month?” The explanation, according to experts, is that one survey determines how many jobs were created while the other is focused on the unemployment trends in the country. Each survey has its own criteria and different sets of participants. That is why the results can be conflicting at times.

One of the surveys looks at the payroll of large corporations and government agencies. This type of survey determines the number of jobs created or lost by looking at the number of employees earning a yearly salary.

The other kind of survey, specifically a household survey, interviews adult household members and asks qualified participants if they are employed or not. They would be counted as unemployed if they were looking for a job at the time of the survey. Those who do not have a job currently and will not be going out to find one in the near future are not considered to be part of the labor force and are therefore not counted.

Payroll surveys focus on large employers and government agencies and do not include farm-related employers in their research. On the contrary, household surveys count farm workers, self-employed individuals, and newly hired employees.

Though many institutions, economists, and ordinary individuals prefer household surveys, they are more volatile and the results can greatly vary from month to month. Payroll surveys, on the other hand, tend to look at 140,000 companies and government offices, which may provide a better platform for payroll projections and forecasts.

Economists and career experts concur that surveys tend to equalize over time. Since the end of the economic recession in June 2009, household surveys have shown that, on the average, more than 2.2 million extra Americans are now employed. The payroll surveys since Jun 2009 have shown that the US economy has added more than 2.7 million jobs.

At present, many experts are looking on the bright side. The increase in jobs may be strong enough to persuade the Federal Reserve not to go on with additional stimulus packages in September. This will have a good effect on investors, who will typically invest more if they see strong indications that the US economy can wade out on its own without any assistance from the Federal Reserve.

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