Could the Employment Picture Be Better than the Government Reports?
Private unemployment data raise questions about glum Labor Department stats
Recently, the country's economic spirits were taken on a two-day roller coaster ride. On Thursday, numbers from payroll firm ADP suggested a jump in employment, estimating that the private sector added 157,000 jobs in June, fueling hopes for a recovery that was back on track. Twenty-four hours later, the bubble burst when official government unemployment numbers said that the economy created only 57,000 private-sector jobs in June. Subtract the 39,000 jobs lost in the public sector, and the economy added 18,000 jobs last month, creating a 0.1 percent bump in the employment rate. ADP isn't the only firm whose figures contradicted the
Though it appears that several outside indicators were overly optimistic -- or just flat-out wrong -- about June's jobs situation, the truth is much more complicated. Different organizations produce their own employment estimates by capitalizing on their own access to exclusive data. ADP's figures reflect its many clients' payroll data -- the company estimates that it pays 1 in 6 U.S. employees. The Conference Board's Employment Trends Index boils eight separate employment indicators, including data from the board's consumer confidence survey, down to one score.
There is a mismatch between jobs and workers.
Jobs are important, but other factors are key to economic confidence.
Gallup indicators of economic confidence and job market health do not appear to track closely together. Gallup's Job Creation Index, which measures the percentage point difference between employed people who say their workplaces are hiring and those whose employers are firing, has been on a slow but steady upward trend since early 2010. Currently it is at 14, up 8 points from where it was a year ago. The firm's economic confidence index, however, is at -42, down 11 points over the last year. This may reflect any number of economic factors, like increases in food or gas prices, or general pessimism about future job creation.
The job market is firmly stuck in neutral.
Though some private indicators seem optimistic and
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