U S Adds 559,000 Jobs In May, Unemployment Falls To 59%

U S Adds 559,000 Jobs In May, Unemployment Falls To 59%

Policymakers and analysts should treat payroll data with caution when making comparisons to employment levels in 2001 and earlier years. Contrary to the conventional wisdom, the best measure of job growth now comes from smoothed total employment reported in the household survey. Consequently, policies aimed at protecting illusory lost QBRE jobs are ill-advised. Employment in America is rebounding strongly, and the increasing dynamism of U.S. job markets should not be clogged by misguided and misinformed cures. The Census Bureau’s CPSinterviews about 60,000 households each month, asking detailed questions about demographic characteristics and labor market outcomes.

It is an influential statistic and economic indicator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market. According to the 2019 American Community Survey, sixty nine percent of hired farmworkers reside in counties that are defined as metro . This largely reflects the fact that most of the main farming areas in California, Arizona, and other Western States lie in large counties that also include major cities and thus are defined as metropolitan. Significant numbers of farmworkers are also found in metro counties in the Great Lakes States and in the South Atlantic. In May, employment in leisure and hospitality increased by 292,000, as pandemic-related restrictions continued to ease in some parts of the country.

Legal Status And Migration Practices Of Hired Crop Farmworkers

One consequence of the emergence of a consultant-driven workforce is that U.S. labor markets are even more flexible–which, ironically, will improve the economy even as it makes payrolls look anemic. Sclerotic labor markets lead to higher unemployment rates, and this new economy is based on labor flexibility. The high variability on a month-to-month basis is a concern, but critics should take care to understand its real cause. High variability in the CPS, beyond the January population spikes, is not a result of a small sample size.

• Bureau of Labor Statistics, Department of labour on the first Friday of the month.
• A portion of both reported zeros and returns from zero in the current month from the sample were used in estimation to better account for the fact that business births and deaths will not offset.
• The majority are wage and salary workers, hired directly by farmers, but some are employees of agricultural service companies, including farm labor contractors, custom harvest providers, and management service providers.
• Note that BEA’s data on self-employment are not comparable to other sources of data on self-employment, because they are not limited to those for whom self-employment is the primary activity.
• We can think of the payroll survey as counting all the “brown-eyed” workers at traditional firms, plus an extrapolation of the “blue-eyed” workers at start-ups who do not yet have payroll records.
• Published statistics include national-, State-, and county-level tables on many topics, including land use and ownership, operator characteristics, production practices, income, and expenditures.

These broader views of gross job flows, as opposed to the more limited data on net job changes in the CES and CPS, offer a potential confirmation of the turnover hypothesis. As the debate over the survey disparity has unfolded, most observers have focused on the definitional case against the payroll survey. However, most attempts to refine the apples-to-oranges comparison into an apples-to-apples comparison miss the heart of the matter. This is not a case of a household survey that counts all workers (traditionally employed plus self-employed) versus a survey that counts only payroll jobs .

Payroll Employment Current Employment Survey

Virgin Islands to collect data and publish employment estimates independent of national estimates. Department of Labor, is an employment-based, random-sample survey of U.S. crop workers (neither livestock workers nor seasonal workers on H-2A visas are covered) that collects demographic, employment, and health data in face-to-face interviews. The NAWS is the source of estimates of legal immigration status of the Nation’s crop farmworkers and is the basis for much of the research on farmworker health and well-being.

Finally, a new hypothesis quantified in this report is that decelerating turnover is artificially deflating company payrolls, creating an illusion of 1 million jobs lost since 2001. The heightened insecurity since September 11, the Iraq war, and the specter of outsourcing are logical explanations for reduced turnover. Here again, innovative new data series on employment dynamics from the BLS allow economists to confirm this hypothesis. This is especially interesting because job turnover skyrocketed during the fast-paced labor markets of the 1990s, when labor demand was very high.

Observers should keep in mind that these calculations are based on only a sketch of the turnover problem, using the best available data on gross job flows. Critics will remark that re-employment rates are inexact,30 but the fact that these rates are also pro-cyclical suggests a stronger, not weaker, deflation in payrolls. (See the Appendix.) Nevertheless, the existence of sizeable payroll deflation is the important point, because this problem in the payroll survey is simply not in the public conversation on jobs, and it should be. The Labor Department recently started reporting a monthly data series on Job Openings and Labor Turnover with data starting in December 2000. Both series confirm that the rate of gross job flows has decreased during the past five years. From the sample, CES produces and publishes employment, hours, and earnings estimates for the nation, states, and metropolitan areas at detailed industry levels.

Farm Labor

Although the two survey employment levels track closely over time, the gap between them is somewhat irregular. Nonfarm payrolls represent the total number of US employees on the payroll of businesses during the pay period which includes the 12th of the month. Although nonfarm payrolls represent a very large portion of the US workforce, certain employees are not included in the nonfarm payrolls tally.

Nevertheless, the BLS researchers did not attempt to quantify the inflationary effect of turnover on the CES. A rough estimate of “hazel-eyed” workers who misidentify themselves as “brown-eyed” may be useful. If new self-employed workers misidentify themselves in the household survey in 50 percent of cases, then the measured number of self-employed workers should actually be doubled. Congress and the BLS should consider rephrasing some questions on the household survey to begin tracking this emerging class of workers. In the meantime, awareness of the modern company structure and modern workforce will help policymakers to keep “anemic” payroll growth in perspective.

Size And Composition Of The U S Agricultural Workforce

Revisions to previous months were substantial, with the May and June reports revised higher by a combined 119,000, bringing the current three-month moving average to an impressive 832,000. The QCEWprovides monthly estimates of employment and earnings for all industries, but is limited to employers who are mandated to contribute to State unemployment insurance funds. This excludes some smaller farm employers in States that do not have universal unemployment insurance coverage. The QCEW classifies farm employers by their primary product, and then reports employment and earnings for all occupations employed in that industry, at thenational, State, and county levels. Some results are suppressed at lower levels of geography and finer industry detail to protect respondent anonymity.

These data refer to employed persons who teleworked or worked at home for pay at some point in the last 4 weeks specifically because of the pandemic. Department of Labor, Bureau of Labor Statistics, Contingent and Alternative Employment Arrangements, February 2001 . The BLS is skeptical of the start-up explanation, and recent benchmarks confirm the BLS’s position. Self-employment is a different matter, and the latest statement by the BLS commissioner confirms the appearance of a new class of contractors. The evolution of the workforce–specifically, the demographic emergence of consultants and contractors who do not consider themselves self-employed–is a likely wedge between the surveys.

The critical months of the 1992 presidential campaign coincided with a string of erroneous payroll survey reports. Although the recession was officially over as of March 1991, jobs continued to erode according to the payroll survey. In October 1992, the payroll count was announced as 108.4 million, and voters went to the polls with that number in mind.

U S Adds 559,000 Jobs In May, Unemployment Falls To 59%

It was called a jobless recovery and blamed on President George H. W. Bush. But today, the October 1992 payroll survey measure of total nonfarm employment is listed as 109.0 million. Chart 2 shows the accumulated increase in employment in the months after a recession ends and compares the current recovery period to the two survey levels averaged over the last five recessions. Trends of job recovery in the different surveys after the last five recessions appear almost identical, whereas this recovery has seen unprecedented declines in payroll employment.

In 1990, the average real farm wage for nonsupervisory crop and livestock workers was just over half the average real wage in the nonfarm economy for private-sector nonsupervisory occupations ($10.20 versus $20.19). By 2020, the farm wage ($14.62) was equal to 59 percent of the Wall Street reform nonfarm wage ($24.68). In other words, the gap between farm and nonfarm wages is slowly shrinking, but still substantial. Many hired farmworkers are foreign-born people from Mexico and Central America, with many lacking authorization to work legally in the United States.

However, the widening divergence in the two series has shaken the conventional wisdom. Since the recession ended in November 2001, payroll jobs are down by 716,000 as opposed to a CPS increase of 2.2 million employed non farm payroll Americans. This 3 million-job mystery can be resolved through a critical examination of what the two surveys measure and how those measures should be recalibrated for an economy that has evolved dramatically.

Although the income questionnaire is less detailed than CPS, its larger sample size makes the ACS a more reliable measure of income and basic labor market outcomes for smaller geographic regions. Farmworkers may be identified using industry and occupation codes in theACS Public Use Microdata files. The field-level phase collects information on production practices and costs (fertilizer, pesticide, labor, tillage, seed, etc.) for target commodities. The farm-level phase collects financial information for farm businesses and a variety of financial and demographic information (age, education, occupation, off-farm income, etc.) for farm operators and their households.

Even so, it is no clearer that survey respondents would identify themselves as independent contractors instead of self-employees when they maintain a self-image as traditional employees. If forecasting GDP growth is the goal, then 50 years of research suggest that the payroll survey is preferable because of its proven high correlation with GDP. This rationale is not one used in public debates, but it may be more important than anything else for academic economists and Wall Street analysts. Urrent sample growth rates were included in the net birth-death forecasting model to better account for the changing relationships between business openings and closings. A portion of both reported zeros and returns from zero in the current month from the sample were used in estimation to better account for the fact that business births and deaths will not offset. For the net birth-death model, we produce a seasonally adjusted version of the “total nonfarm” series.

Join your colleagues in participating in this exclusive survey of global business confidence. While the Office of Management and Budget defines 342 MSAs , the BLS only reports data for approximately 275 of these areas. For more information, see the Concepts section of Chapter 2 of the BLS Handbook of Methods ; this section includes definitions of the types of data available from the survey.

The disparity widens during recessions and narrows during periods of rapid growth in gross domestic product . Such variation strongly suggests a statistical bias in one of the surveys. The disparity of 3 million jobs between the household and payroll surveys since the recovery began is unprecedented.

One-quarter of respondents are rotated out of the survey each month, which keeps the survey respondents fresh. The overriding advantage of the household survey is its direct interface with American workers, which makes it a higher quality measure in many ways. One of the most visible economic issues in this presidential primary election cycle is the apparent failure of the economy to create jobs.

It also eliminates the key rationale against household survey employment data. The results are puzzling because the surveys are measuring a changing economy, not because the surveys are any different or less correct in their methodology. Analysts know intuitively that today’s economy is structurally different from the economy of five or 10 years ago, but the consequences of the new economy are difficult to predict.

Farm employees, self-employed individuals, employees on strike, employees on leave or laid off are not included in the nonfarm payrolls total. Bureau of Labor Statistics, Department of labour on the first Friday of the month. Nonfarm payrolls are reviewed by market analysts to gauge the state of the economy. A relatively small increase or an outright decline in nonfarm payrolls is typically seen as an indicator of economic weakness. On the other hand, a sharp increase in nonfarm payrolls can signal a strong or booming economy.

BY Daniel Dubrovsky