May 7 (Bloomberg) — Americans are telling the U.S. government that employment in the world’s largest economy is rising even faster than payrolls indicate.
Employers said they took on 290,000 workers in April, a report from the Labor Department showed today in Washington. A separate survey of households showed 550,000 more people were employed last month. Even after adjusting the data to make the counts similar, including subtracting the self-employed and farm workers, the household figures showed a 382,000 jump in hiring.
In the first four months of the year, the adjusted household data shows employment grew by 1.67 million, almost three times the 573,000 increase in payrolls. At turning points in the economy, the former may prove more accurate because it’s more likely to pick up hiring at small companies and new firms that may be under the government’s radar.
“The household survey is actually more reliable than the payroll survey as long as you have several months to confirm the trend,” said :S:d1″>Christopher Low, chief economist at FTN Financial in New York. “And we do.”
The jump in household employment may explain why consumer spending in the first quarter rose by the most in three years. It may also be one reason why federal tax collections are climbing as much as they are, Morgan Stanley economists :S:d1″>David Greenlaw and :S:d1″>Ted Wieseman said in a note to clients today. The Treasury has pulled in $303.3 billion in income tax receipts from the start of the fiscal year in October through May 5, up from $280.1 billion in the same time last year.
‘Undercounting’ Jobs
“The payroll survey may be undercounting employment at this point,” New York-based Greenlaw, chief fixed-income economist, and Wieseman said.
White House economic adviser :S:d1″>Lawrence Summers last week said employment may rebound more than past recoveries would indicate. In the recession that started in December 2007, the labor market broke from historical patterns and the unemployment rate rose more rapidly than was typically the case as the economy shrank. CONTINUED
Payrolls May Underestimate U.S. Jobs as Household Survey Surges – Bloomberg.com
