econimpact_chart.gif

Source: New York Times

Who do you believe: The people who write other people’s payroll checks, or the folks who pay themselves?

That’s the discrepancy between the two key payroll surveys. This is not a matter of semantics or obscure statistical theory: The interpetation of this data divergence of the most commonly referred to surveys is the key to determining whether we are in a self sutaining recovery or not. And that will have a significant impact on policy makers: Whether the FOMC changes their bias language tomorrow, and how soon thereafter they start raising short term interest rates.

Ultimately, this issue — in conjunction with the situation in Iraq — will be the determinant of the 2004 Presidential election.

Here’s what the NYT had to say on the matter:

“The self-employed are a group that statisticians have a hard time dealing with, and the apparent growth in that group may or may not be a good sign for the economy. Some people who say they are self-employed may really be out of work and trying to bring in money as consultants or freelance workers. Others may be doing very well, living a dream of boss-free success.

In any case, the government reported that the number of self-employed workers rose by 156,000 last month, to 9.2 million. That gain was a primary reason that the unemployment rate dropped to 5.9 percent.

The number of people on nonfarm payrolls – a number that excludes the self-employed – rose just 57,000, far less than expected, and that led most analysts to call the report a disappointment.”

Source:
Grasping at the Statistics on the Self-Employed
By Floyd Norris
NYT, December 6, 2003

http://www.nytimes.com/2003/12/06/business/06impact.html

Category: Finance, Media

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “A Tale of Two Employment Surveys”

  1. nyc99 says:

    Employment Surveys – Believable or Not?

    Barry L. Ritholtz helps clear the confusion resulting from the discrepancies we see in employment numbers. Who do you believe: The people who write other people’s payroll checks, or the folks who pay themselves?The Big Picture: A Tale of Two…

  2. Anonymous says:

    When you were making a buck and a half annually and find yourself out of work it is best to claim self-employment as opposed to the “not wanted by anybody” that unemployment implies.

  3. If I Had A Hammer

    Over at The Big Picture, Barry Ritholtz argues that the structural shifts that have produced the Jobless Recovery aren’t the Administrations fault. Their blame lays…

  4. If I Had A Hammer

    Over at The Big Picture, Barry Ritholtz argues that the structural shifts that have produced the Jobless Recovery aren’t the Administrations fault. Their blame lays…