Mish's Global Economic Trend Analysis |
| Another Bell-Ringing Discrepancy: Gallup vs. BLS Unemployment Rate Posted: 08 May 2014 11:34 AM PDT In light of the enormous discrepancy between the Household Survey and the Establishment Survey in last Friday's jobs report, I thought it might be worthwhile to revisit the discrepancy between Gallup and the BLS that I have talked about before. Recall that last Friday the Establishment survey showed a net gain in jobs of 288,000 while the household survey showed a net loss in employment of 73,000. Those are seasonally adjusted numbers. For details please see Nonfarm Payrolls +288,000, Unemployment Rate Drops to 6.3%; Household Survey Employment -73,000, Labor Force -806,000, Seasonally Adjusted Numbers
Gallup Unemployment Rate The weekly Gallup Employment Poll shows the percentage of unemployed is 6.9% and the percentage of underemployed is 16.4%. Gallup explains "Weekly results reflect 30-day rolling averages ending each Sunday, based on telephone interviews with approximately 30,000 adults. Because results are not seasonally adjusted, they are not directly comparable to numbers reported by the U.S. Bureau of Labor Statistics." Actually, results are directly comparable if Gallup would simply use the BLS non-adjusted data. Here are the comparable charts. Gallup Non-Adjusted Unemployment Rate  BLS Non-Adjusted Unemployment Rate  The scale on the Gallup chart is skewed by inclusion of the payroll-to-population statistics, otherwise it would be easy to spot cyclical month-to-month variations on the Gallup chart as well. The valid comparison in this case is 6.9% vs. 5.9%. One percentage point is quite a difference. Using Gallup data from the closest week I could find each month going back to 2010 the differences are rather startling. Gallup vs. BLS Not Seasonally-Adjusted Unemployment Rate
In 2010, the BLS and Gallup were essentially in agreement. A large discrepancy developed in the 2011. That discrepancy narrowed in 2012 and 2013, then exploded higher in 2014. The BLS surveys about 60,000 and Gallup 30,000 but both should be sufficient to determine a relatively accurate answer. Bell-Ringing Month Does the BLS try harder than Gallup to prove someone is not in the labor force and therefore not unemployed? Perhaps. And this past month certainly provided bell-ringer wake-up call from the BLS. As noted above, 806,000 people dropped out of the labor force on a seasonally-adjusted basis causing the unemployment rate to plunge in spite of the fact household employment fell! On a not seasonally adjusted basis, the labor force fell from 155,627,000 to 154,845,000. That is a decline of 782,000. Either way, it's a bell-ringer. I suspect that for whatever reason, the BLS picked up a huge labor-force decline but Gallup did not. If so, that explains the jump in the difference between the two surveys from 0.4 percentage points to 1.0 percentage point. Even if that thesis is true, it does not explain "why". Nor does it explain which survey is more accurate. Nor does it account for large differences that started in 2011. Regardless of numerous unanswered questions, the Gallup number seems closer to reality given the overall struggling nature of this economy, the meager rise in median income, and the historically poor recovery in GDP. And if we added back in those who dropped out of the labor force by fraudulent disability claims, an unemployment rate closer to 9 would seem more accurate still. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com | ||||||||||||||||||||||||||||||
| Pro-Russia Separatists Defy Putin on Independence Vote; Alternative Points of View Posted: 08 May 2014 10:29 AM PDT Yesterday there was a glimmer of hope in Ukraine when Putin asked separatists in Donetsk to delay their vote so that more dialog could start. Putin also claims to have pulled troops back from the border, but as with everything in Ukraine, that claim is disputed. Today, Pro-Russia Separatists Defy Putin on Independence Vote. Pro-Russian separatists in Donetsk said they would press on with their referendum on autonomy from Ukraine, defying a call from President Vladimir Putin to delay the vote. No Civil War "Threat" For starters there is no "threat" of civil war. There is civil war. The carnage in Odessa proves as much. The actual threat is that the civil war widens or that Russia intervenes in it. Points of View
Some of the above are mutually exclusive, others aren't. But if no one is in control of the separatists, and I believe it's obvious that is the case, then options number 1 and number 4 go out the window. By implication, numerous US allegations fly out the window as well. The US and Kiev are busy spreading propaganda points 3 and 5. While Russia would have you believe points 2 and 6. Does propaganda on both sides overplay reality? I suggest that is undoubtedly the case, this time as always. But given numerous videos floating around on Odessa, I will take door number 6 over door number 5 especially given the methods used. If you believe US propaganda, you pick door number 5. Regardless of what you believe, if you do not realize the overwhelming Western media bias in favor of Kiev, and the Putin bias from Russia, then you are not thinking clearly. Both sides engage in extreme propaganda campaigns and it is best to question both. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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