Which payroll survey is more accurate: the Nonfarm Payroll (Establishment) survey, which shows 162,000 new jobs have been created since December or the Household survey, which shows over 1 million new jobs have been created since December?
Argus Research notes:
"In the year ending August 2003, for example, the Payroll survey originally showed a loss of 463,000 jobs, whereas the Household Survey showed the economy had added 313,000 jobs. At that time, Carnegie Mellon economist Alan Meltzer wrote that the reason for the discrepancy is 'that the number of companies does not remain fixed. In our dynamic economy, old firms die and new ones are born. The Labor Department learns about the deaths quickly, but it takes longer to learn about the births.'"
"In periods of significant downsizing, such as the past two recessions, we think the Household survey is much more likely to be accurate. Using available surveys, we calculate that since 1948, the bottom in Household employment has, on average, occurred 2.9-months before the bottom in Payroll employment. We conclude that U.S. employment bottomed in December."