Yesterday's employment report showed far more growth in employment in the household survey than in the establishment survey. Most economists view the establishment survey, which is much larger, as being the better gage of employment, but there are doubters (many of whom are not Republicans). I have examined this issue in the past and generally concurred with the establishment view. (It's worth noting that the establishment survey actually showed far more rapid job growth in the 90s.) I am more agnostic now, because a quick glance at Social Security tax collections suggests a more rapid pace of growth than is consistent with the wage growth and job growth reported in the establishment survey. (It's late, I could be missing something). There is an important sidebar to this argument. If job growth is actually more rapid than is being reported by the establishment survey, then productivity growth is lower than BLS is now reporting. BLS uses the establishment survey for hours data when it calculates productivity growth. If the establishment survey has understated job growth, then BLS is understating hours growth in its productivity growth calculations, and therefore overstating productivity growth (unless GDP growth is also understated).
--Dean Baker
