Friday, January 16, 2004

Confidently employed 

PowerLine has asked the following question on the latest consumer confidence report:
I've always wondered about the accuracy of these job-creation claims. Doesn't it seem odd that people who write about immigration round off the number of illegal aliens currently in the country, many of them holding jobs, to the nearest million, while economic reports that purport to count jobs claim to have accuracy several orders of magnitude greater? And might there be some connection between the enormous number of uncounted illegal immigrants and the mystifyingly small number of jobs officially being created?
The job creation number that Hindrocket is quoting is the payroll report, which uses data from payroll tax filings, and it differs sharply from the household employment data. Brad Delong has written about this already. But the point is, this divergence has been going on for a long time but in the opposite direction. Look at Charts 1 and 2 in that last link. If that trend is now reversing, it could explain a good bit of the mixed signals we're getting now: it might just be bad data.

See also the Bureau of Labor Statistics if you want the nitty-gritty.