EMPLOYMENT NEWS BETTER THAN WE THINK
Brad DeLong says the current methods of measuring employment understates the good news:
John Kitchen, an economist with the House Budget Committee… studied the performance of payroll employment during the first 20 months of five previous economic recoveries, and found that in each case, the government had to revise up its initial payroll estimates…. During the 20 months after the 1991 recession ended, for instance, the government… bumped up [employment growth by 330,000]…. “It might be that we’re not seeing as much of an ongoing decline as is suggested in the official numbers,” Mr. Kitchen says….
But… Labor Department officials, are skeptical…. One reason is that the department’s Bureau of Labor Statistics has been aware of the establishment survey’s flaws for many years and has tried to do something about it. Three years ago, it began phasing in a new system for surveying businesses that is more aggressive…. Ms. Getz notes that because Mr. Kitchen’s study was based on events that happened before this redesign, it might not apply anymore…. However, she acknowledges that the redesigned survey is going through a trial by fire, because the recession and recovery marks the first test of the new procedures.
Interesting.
