Job Growth Moderating; Or Is It?

Today’s announcement by the Bureau of Labor Statistics put the increase in payroll employment at 121,000 last month. It’s the “nonfarm employment” number from the Bureau’s Establishment Survey, and indicates that payroll growth is moderating from the faster pace of last year.

On the other hand, if you look at the increase in employment from the Bureau’s Household Survey, employment increased by 387,000. Here employment growth is, if anything, accelerating. What is going on? The government is measuring triple the employment growth in the household survey than in the establishment survey.

If you step back and look at graphs of the numbers, the difference in the two surveys is quite stark. Here’s a graph of the household survey and here is a graph of the establishment survey.

The household survey shows strong employment growth consistently for the last two years. Going back to the last recession, it shows negative job growth only for twelve months, and shows employment increase comparable to the glory years of the late 1990s.

The establishment survey shows employment growth moderating since the first of the year. Going back to the last recession, it shows a sharp drop in employment for a year, from January 2001 to January 2002, followed by two years of no job growth. Starting in mid 2003, employment growth has been solid and consistent—five million new jobs—but the job growth has never come close to the job growth in the 1990s.

What is going on?