Over at Angrybear this morning, I noted the good news from the payroll survey (job growth = 166,000) was accompanied by bad news if you follow the household survey (job loss = 250,000). I ended with:
The employment to population ratio fell from 62.9% in September to 62.7% in October as the household survey recorded an employment decline of 250,000. The labor force participation rate also feel from 66% in September to 65.9% in October. Remember a few years ago when the National Review cheerleaders kept telling us how the household survey was the better measure of the labor market? Betcha they are not saying that today.
So what has Lawrence “the household survey is the best indicator” Kudlow saying these days?
While there wasn’t much today from the Corner Kids, Kudlow had plenty to say yesterday:
Real gross domestic product, the best summary report of the American economy, came in at a breathtaking 3.9 percent annual rate for the third quarter. In fact, following the 3.8 percent growth rate for the second quarter, the U.S. economy has posted its strongest quarterly growth in four years ... Even employment is holding its own. According to Automatic Data Processing’s private employment survey, which showed its strongest gain in four months, October looks like it will produce about 125,000 new jobs.
Not bad for the last two quarters but if one looks over the past six quarters, cumulative real GDP growth has been only 3.5% or 2.3% per year. Employment is holding its own? Let’s diagram the employment to population ratio from October 2006 to October 2007. It seems Larry’s favorite measure of employment is not keeping up with population growth after all.