A tale of 2 US employment surveys, at a glance

AP News
Posted: May 04, 2012 6:08 PM
A tale of 2 US employment surveys, at a glance

The U.S. economy added just 115,000 jobs in April, below March's gain of 154,000 and the fewest in six months. Yet the unemployment rate fell.

How did the rate fall despite such a small job gain? Because the government does one survey to learn how many jobs were created and another survey to determine the unemployment rate. Those surveys can produce results that sometimes seem to conflict.

One is called the payroll survey. It asks mostly large companies and government agencies how many people they employed during the month. This survey produces the number of jobs gained or lost. In April, the payroll survey showed that companies added 130,000 jobs, and federal, state and local governments cut 15,000.

The other is the household survey. Government workers ask whether the adults in a household have a job. Those who don't are asked whether they're looking for one. If they are, they're considered unemployed. If they aren't, they're not considered part of the work force and aren't counted as unemployed. The household survey produces each month's unemployment rate.

In April, the household survey showed that the number of people in the work force fell by 342,000. Most of them were unemployed and stopped looking for a job. That lowered the unemployment rate slightly, from 8.2 percent to 8.1 percent.

The percentage of those 16 and over in the work force fell to 63.6 percent, the lowest in more than 30 years.

Unlike the payroll survey, the household survey captures farm workers, the self-employed and people who work for new companies. It also does a better job capturing hiring by small businesses.

But the household survey is more volatile from month to month. The Labor Department surveys just 60,000 households, a small fraction of the more than 100 million U.S. households. The household survey showed that the number of people who say they have a job surged by 631,000 in January and 428,000 in February.

By contrast, the payroll survey seeks information from 140,000 companies and government agencies _ and they employ roughly one-third of non-farm employees. The employers send forms to the Labor Department noting how many people they employ. They also provide wages, hours and other details.

Most Americans focus more on the unemployment rate, which comes from the household survey. But economists generally prefer the jobs figure from the payroll survey.

Economists note that the surveys tend to even out over time. In the past year, the payroll surveys have shown that employers added roughly 1.8 million jobs. The household surveys have shown that close to 2.2 million more people said they found work.