Did you see this, must be where they are hiding the discrepancy:
Odd Farm-Sector Surge Distorts Jobs Data
Tuesday November 5, 2:48 pm ET
By Wayne Cole - Reuters
NEW YORK (Reuters) - An inexplicable surge in farm jobs has played a major part in keeping the U.S.
unemployment rate down in recent months, despite persistent weakness in other labor market indicators.
Without the jump in farm-based employment
since June, the jobless rate would have climbed
steadily to reach 6.0 percent in October. Instead
the jobless rate fell in September and then
inched back to 5.7 percent last month.
If it had topped 6.0 percent, consumer
confidence might have suffered far more, bond
yields tumbled and the case for an interest rate
cut -- now expected on Wednesday from the
Federal Reserve -- might be that much clearer.
The strength baffles analysts and statisticians
alike and could reinforce financial market
skepticism of the unemployment figures as a
reliable indicator of the economy.
"The massive surge in farm jobs has been an
important factor depressing the published
unemployment rate at a time of little or no growth
in nonfarm payroll employment," said Rory Robertson, an interest rate strategist who covers the U.S. economy for
Australian house Macquarie Equities.
"Of course, the rapid growth in farm jobs -- the fastest in more than 50 years of data -- seems implausible, to say
the least," he added.
The Department of Labor uses a monthly survey of 60,000 households to compile the unemployment series, in
contrast with the monthly payrolls figures, which come from an established survey of around 350,000
businesses.
In recent months the unemployment rate has diverged from the trend in payrolls, dipping from 5.9 percent in June
to 5.6 percent in September before edging up to 5.7 percent last month.
At the same time, payrolls growth has been muted at best, running at levels which typically would be associated
with a rise in the jobless rate.
The dichotomy has stirred a major debate among economists -- some of whom claim that the unemployment
survey is flawed, while others argue that it is actually more representative of the economy as a whole and the
payrolls survey is at fault for overlooking hundreds of thousands of small firms.
The odd behavior of the farm sector would seem to support critics of the unemployment survey and suggests that
the true jobless rate is higher than the figures suggest.
UP ON THE FARM
The stellar performance of the usually laggard farm sector certainly sits at odds with the sluggish state of the
broad economy.
Since June some 415,000 jobs have been created in agriculture, excluding forestry and fishing -- a rise of 13
percent and easily the fastest growth in decades.
While the farm sector makes up only 2.6 percent of total employment, its surge has accounted for almost fully half
of the 861,000 new civilian jobs generated since June.
"It's certainly an unusual occurrence, but we haven't looked into it as such," said a spokesperson at the
Department of Labor.
She noted that much of the jump came in October and that the figures were volatile from month to month,
suggesting farm employment could easily fall sharply in November.
Farm jobs climbed 227,000, seasonally adjusted, in October to 3.525 million, having risen 110,000 the month
before. In June total farm sector employment was reported at 3.110 million.
The strength of farm jobs also came as a surprise to the Department of Agriculture, where an economist said
there had been no developments in the industry to account for such an astounding pickup.
"Is anything real going on here?" asked Robertson at Macquarie. "Or is it best just to walk away with the
conclusion that the household survey data -- including the published unemployment rate -- are too erratic to be
taken seriously?" |
