Household Survey Shows No “Deceleration”

The chart below graphs monthly employment as measured by the household survey (red) and payroll employees (green). I have subtracted 7000 from the household survey in order to put them on the same scale.

The household survey shows little, if any, reduction in the rate of job loss.

Which survey should we trust? The household survey is based on a smaller sample, so for that reason economists tend to discount its monthly fluctuations. For a given sample size, economists think that the household survey is more reliable for most purposes.

Thus, if a pattern in that data is repeated a couple of months in the household survey, then sampling error cannot be blamed for creating that pattern. Although some observers look at the green series and expect an upturn soon, as I posted yesterday, there is at least as much room for employment to fall over the 4-5 months as to increase, even on the basis of pure statistics.

[My forecasting model gives another reason, separate from the household survey, that employment could fall: consumption behavior seems to indicate that consumers have long expected the recession to get a bit worse than it had gotten through Nov 2009].

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About Casey B. Mulligan 76 Articles

Affiliation: University of Chicago

Casey B. Mulligan is a Professor in the Department of Economics. Mulligan first joined the University of Chicago in 1991 as a graduate student, and received his Ph.D. in Economics from the University of Chicago in 1993.

He has also served as a Visiting Professor teaching public economics at Harvard University, Clemson University, and Irving B. Harris Graduate School of Public Policy Studies at the University of Chicago.

Mulligan is author of the 1997 book Parental Priorities and Economic Inequality, which studies economic models of, and statistical evidence on, the intergenerational transmission of economic status. His recent research is concerned with capital and labor taxation, with particular emphasis on tax incidence and positive theories of public policy. His recent work includes Market Responses to the Panic of 2008 (a book-in-process with Chicago graduate student Luke Threinen) and published articles such as “Selection, Investment, and Women’s Relative Wages,” “Deadweight Costs and the Size of Government,” “Do Democracies have Different Public Policies than Nondemocracies?,” “The Extent of the Market and the Supply of Regulation,” “What do Aggregate Consumption Euler Equations Say about the Capital Income Tax Burden?,” and “Public Policies as Specification Errors.” Mulligan has reported on some of these results in the Chicago Tribune, the Chicago Sun-Times, the Wall Street Journal, and the New York Times.

He is affiliated with a number of professional organizations, including the National Bureau of Economic Research, the George J. Stigler Center for the Study of the Economy and the State, and the Population Research Center. He is also the recipient of numerous awards and fellowships, including those from the National Science Foundation, the Alfred P. Sloan Foundation, the Smith- Richardson Foundation, and the John M. Olin Foundation.

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