The Labor Department’s monthly Employment Situation report covers two separate surveys that take different approaches to measuring employment. The establishment survey measures payroll employment reported at a sample of 140,000 businesses and government agencies representing 410,000 worksites across the U.S. The data are adjusted for seasonal variations and for business births and deaths, which the survey does not count for logistical reasons. The establishment survey reported that total payroll employment increased by 103,000 net new jobs in December. The household survey, which is drawn from a sample of 60,000 households, is more volatile due to the smaller sample size. The unemployment rate is calculated from this survey, which asks respondents a number of questions including whether they were employed or seeking work during the month. The household survey’s measure of employment includes the self-employed, unpaid family workers, agricultural workers and private household workers – categories not covered in the establishment survey. In December, the household survey registered a gain of 297,000 people (civilian, non-institutional population aged 16 and up) who said they were employed compared with the November number. The household survey, although it is more volatile, is thought to do a better job of registering changes early in the business cycle as start-ups are formed. A monthly employment change of about 100,000 is statistically significant in the establishment survey, while the threshold for a statistically significant change in the household survey is about 400,000. Over time, both measures of employment generally move in tandem. At present, both continue to paint a picture of a sluggish recovery in the labor market.
Source: U.S. Bureau of Labor Statistics, Grubb & Ellis