Last week I penned that the BLS Jobs Situation Was Strong in November 2014 for the Establishment Portion But the Household Portion Shows Almost No Jobs Growth. The establishment portion showed job gains of 321,000 whilst the household portion showed job gains of 4,000. One question is whether this real discrepancy throws some cold water on the general belief that jobs growth is becoming fairly strong in the USA. Some think any government release is manipulated.

Barry Ritholtz penned Economics, Data and Conspiracy Theories which answers the question of government data manipulation better than I could, stating in part:

Let me remind you that when George W. Bush tried to fire a few U.S. attorneys for political reasons, that secret lasted approximately a nanosecond, eventually leading the U.S. Attorney General to resign.

Now imagine trying to keep the purported book-cooking a secret at the BLS, where thousands of economists, statisticians and clerks help assemble all of the regular economic reports.

Ritholtz in this same post talked about the BLS jobs report and not concentrating heavily on any single month – but looking at the trends.

The USA is rather lucky in that there are two government data sets (the household and establishment surveys from the BLS) and a private data set from ADP where operational employment data can be obtained almost in real time. In addition there are several surveys (including NFIB small business and ISM surveys) that provide more information on employment.

Non-Government Data and Surveys

I can understand why some do not trust government data – but I trust NO DATA in isolation. And the data from one month tells you little – it is trend that tell you what is going on. One never knows if there are methodology or sampling errors. Further, there must be independent confirmation or correlation between independent data sets. I specifically distrust surveys (it is generally averages of opinions) but when a survey continues to say the same thing over and over, a certain confidence evolves in the message the survey is telling. Take the ISM surveys.

Institute of Supply Management (ISM) Employment Index – Manufacturing (blue line) and Services (red line)

Since February 2014, both ISM surveys have been in an uptrend – but it is interesting to note that both surveys declined moderately in November 2014. The ADP employment gains also were “less good” in November.