Dusting off the "household survey" of jobs is simply a way to make the jobs picture look better than it is. When you add in a mistake of 600,000 jobs, it really cooks the books.
You must have heard the claim that "more than 1 million jobs have been added over the past year." I've recently seen Steve Forbes, Richard Drier and other Republicans pushing it because it makes the administrationlook better on jobs.
They're all wrong.
And a more reliable survey tells us there was a loss of 291,000 jobs during the same time period.
Part of the reason for the difference of 1,291,000 jobs is that the Heritage Foundation used unreliable data; the other is that they made a huge mistake with the numbers.
The bad claim starts with there being two job surveys. Of the two, the payroll [or "establishment"] survey (officially the "Current Employment Statistics" program) has always been considered superior to the household survey (officially the "CurrentPopulation Survey"). The Heritage Foundation used the latter, even though:
The Congressional Budget Office (CBO) says:"the establishment survey better reflects the state of the labor markets."
The Bureau of Labor Statistics (BLS) similarly states: "It is our judgment that the payroll survey provides more reliable information on the current trend in wage and salary employment."
Nonpartisan experts agree with the CBO and BLS.
Federal Reserve Chairman Alan Greenspan said that the payroll survey "was a more accurate gauge of the employment situation than the more optimistic household survey" in Forbes Magazine [12/12/ 2004] and said it again in Forbes Magazine [Greenspan - payroll survey best gauge of U.S. jobs 12/25/2004] when testifying to the House of Representatives Budget Committee.
Here's why:
First, the payroll survey covers 40,000,000 workers in establishments with more than one employee. The household survey covers 70,000 workers and makes projections from there. The much larger sample size makes a difference.
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