Published for www.dmarron.com, May 31, 2012
A man with one clock always knows the time. A man with two clocks is never sure.
This week brings the two heavyweights of economic statistics. On Thursday morning we got the latest read on economic growth, and on Friday we learn how the job market fared in May.
Government statisticians and outside commenters usually emphasize a particular headline number in these reports. For the economy as a whole, it’s the annual growth rate of gross domestic product (GDP), which logged in at a mediocre 1.9 percent in the first quarter. For jobs, it’s the number of nonfarm payroll jobs created in the past month (115,000 in April, but that will be revised on Friday morning).
In each case, the government also reports a second measure of essentially the same thing. Jobs day aficionados are familiar with this. The payroll figure comes from a survey of employers, but the Bureau of Labor Statistics also reports results from a survey of people. That provides the other famous job metric, the unemployment rate, and a second count of how many people have a job. The concept isn’t exactly the same as the payroll measure–it includes a broader array of jobs, for example, but doesn’t reflect people holding multiple jobs–but it’s sufficiently similar that it can be an interesting check on the more-quoted payroll figure.
The downside of this extra information, however, is that it can foster confusion. In April, for example, payrolls increased by 115,000, but the household measure of employment fell by 169,000. Did jobs grow or decline in April?