Unemployment rate down to 7.8% BLS own adjustments shows otherwise, but they report it anyway,

The good news yesterday was: Unemployment down to 7.8%!!!

In a month when nothing happened that could possibly explain this sudden and totally unexpected improvement, one has to ask: What happened?

I went to the Bureau of Labor Statistics official website: http://www.bls.gov/web/empsit/ces_cps_trends.pdf and picked up the real story.

In it they show that the payroll survey showed an increase of 114000 jobs and the household survey a giant one month increase of 873000 jobs, a number not seen since the Reagan recovery in the eighties.

The household survey yields a volatile number for a variety of reasons: It only samples 60000 households, and what constitutes employment is not well defined.

Aware of this, the BLS is developing an adjusted household survey employment number with the following definition: This is a research series created from household survey employment to be more similar in concept and definition to payroll survey employment. Household survey employment is adjusted by subtracting agriculture and related employment, nonagricultural self employed, unpaid family workers, private household workers, and workers absent without pay from their jobs, and then adding nonagricultural wage and salary multiple jobholders. The effects of population control revisions also have been smoothed out in the historical data in this series.

This adjusted number showed an increase of 294000 jobs, very good, but a far cry from the 873000 jobs the unadjusted survey indicated

The discrepancy is 579000 jobs, enough to state that the most probable official unemployment number should have remained at 8.1%.


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Engineer, graduated from Chalmers Technical University a long time ago with a degree in Technical Physics. Career in Aerospace, Analytical Chemistry, and chip manufacturing. Presently adjunct faculty at PSU, teaching one course in Computer Engineering, the Capstone Course.

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