03 February 2012

The Stealth Recovery

Excuse me for writing more about job creation, but I really do think that something big is happening here. Curiously, while traditional surveys of companies revealed that 243,000 jobs had been created (itself worthy of a small cheer), the survey of households revealed that 631,000 jobs had been created. (Itself revised downwards from 800-some thousand to adjust for changes in population and labor force estimates.) That's nearly triple the reported rate. See the table below for the differences between this household survey and the traditional measure that gets reported when the government releases "the jobs numbers" to report the latest number of jobs created. For the past few months the household survey has (mostly) been considerably off from the traditional measure, more than double over the last four months.

The household survey better captures the effect of start ups and other entrepreneurial ventures that are not reported on by established companies. To the extent that a recovery is starting at a grass roots level rather than from existing companies again hiring, the household survey is more accurate than is the traditional measure.

Why report on this? It might just be that the recovery is already far ahead of where economists think it is,and they are only now seeming to catch on to the fact that this recovery is real.

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