Uh Oh, Dueling Job Stats

There's something odd about the signals being given off by the Labor Dept.'s two monthly employment measures. While the payroll survey indicates that employment is up a healthy 1.18 million since December, the household survey shows an increase of just 209,000--raising questions about the underlying strength of the labor market.

Most experts regard the payroll survey as the more reliable measure, since it is based on actual business records and is less volatile than the household survey, which is based on interviews with working-age people. But economist Christopher Low of HSBC Markets points out that the household survey often picks up significant shifts in labor market conditions earlier than the payroll measure.

That's because the payroll stats include an upward adjustment for jobs created by business startups the survey doesn't catch. Since this adjustment is really just an educated guess, it can miss the boat if the economy shifts gears.

"The betting is that the current large discrepancy between the two measures will be resolved in coming months in favor of the payroll survey," says Low. "But until and unless that happens, the health of the job market will remain somewhat under a cloud."

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