Would you believe the U.S. economy lost 315,000 jobs in June? And that it gained 372,000 jobs the same month?
It did. So how is that possible?
It’s because of how the U.S. Department of Labor collects data for its monthly employment report. The monthly unemployment rate usually gets most of the attention, followed closely by the total non-farm payroll figure. Both are important gauges for the job market, and they are derived from different sources.
About 130,000 companies are asked each month if they added or eliminated jobs in the past month. Those answers are tallied to make up the payroll figure. A different survey asks about 60,000 people whether they have been working in the past month. That data is compiled for the unemployment rate.
While companies consistently report adding jobs, people have been saying something else this spring.
In June, companies reported adding 372,000 new hires, marking the month American businesses recovered almost all the jobs lost in March and April 2020 as the COVID-19 pandemic took hold.
But that same month, households reported losing 315,000 jobs. It was the second time in three months the household survey found job losses that the company survey didn’t.
The Wall Street Journal noted this divergence in July, writing, “The recent losing streak corresponds with other data suggesting slowing growth and some cracks in the labor market.”
The differing data may be explained by the Labor Department’s Bureau of Labor Statistics’ acknowledgment that the two employment surveys define working differently.
For example, someone who is working freelance is considered employed in the household survey, but companies are asked only about their payroll jobs, not freelance workers. The government agency lists eight reasons why there can be gaps between what the two employment surveys show.
The July jobless data will be released Friday. Company hiring is expected to have slowed from June, yet still be robust. Buried deeper in the data will be what people say about working.
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