Labor Market Disconnect?

By Andrew Paparozzi
In May 6, 2008

Why isn’t the unemployment rate rising along with job losses? As mentioned in our previous posting, nonfarm payrolls shed an additional 20,000 jobs in April to bring the year-to-date decline to 260,000. In the same release, the Bureau of Labor Statistics (BLS) reported that the unemployment rate eased 0.1 to 5.0%. The key factor behind this apparent disconnect; data on nonfarm payrolls and unemployment rates are determined by different surveys.

The jobs data highlighted in the media are from the Current Employment Statistics (CES) survey of nonfarm payroll records. The unemployment rate is computed from the Current Population Survey (CPS)—a monthly survey of households that provides data on whether persons are in or out of the workforce and if they are employed. The household data are more inclusive; in addition to employees on private and government payrolls, self-employed individuals, family, and farm workers are included. Based on the latest release, the household survey is showing a gain of 83,000 year-to-date in the employment level.

Which survey is better? It’s not an either-or proposition. Both surveys provide useful information on different aspects of the labor market, especially when one digs beneath the surface of the headline numbers and analyzes trends rather than focusing on month-to-month swings. We will report on some of our findings in future postings. In any event, recruitment and retention of qualified employees should not be relegated to the sidelines—waiting on the upturn. Even during a weak economy, these remain critical issues for printing companies that want to be in position to create and seize opportunities as they develop.

Joseph Vincenzino

Andrew Paparozzi

Epicomm's Andrew Paparozzi, Vice President/Chief Economist, is well-known for his accurate and thoughtful discussions on the economy and US commercial printing industry. A foremost author and speaker on economic business trends in the printing industry, Paparozzi heads Epicomm's Printing Economic Research Center.

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