URL: http://www.liberaloasis.com/archives/080804.htm#081204
LIBERAL OASIS
August 12, 2004
*** SPECIAL EDITION ***
Interview With Paul Krugman
(posted Aug. 12 1 AM ET)
<snip>
LO: Turning to jobs, the latest conservative line is that we should be
looking at the "household" survey as opposed to the "establishment" [or
"payroll"] survey...
PK: ...The real thing about the household survey, first of all, for
month-to-month changes it's useless. Because its just too noisy.
If you want me to believe in the 600,000 job gain in July, you have to
then say you also believe in the 270,000 job loss in February, which
nobody thinks happened.
And in fact if you go back in November 2002, the household survey
said, I think, that 600,000 jobs disappeared, which nobody believes.
It's just a lousy...very noisy measure, month-to-month.
The other thing: people who take a longer-term thing and talk about
the household survey have this funny habit of not reading the
footnotes.
You can't just take the number from some month in 2001 and compare it
with a month now, because there are population adjustments that are
made in January...
...Anyway, the right way to do it is to look at the
employment-population ratio, which is what the household survey tells
you. What fraction of adults are working.
And what that number does is it goes from, I think, 64.4 in early
2001, drops to 62.2 -- in one month 62.1 but that's probably just
noise -- last summer, and it's now recovered to 62.5.
The point is what you got is this drastic deterioration in the number
of jobs available per person. And a tiny recovery, maybe, over the
past year.
And that's basically a story that's consistent with the payroll
numbers.
<end excerpt>
Michael