The government's August 2012 jobs report was disappointing, as the establishment survey showed just a 96,000 jobs gain. Also dispiriting, the June was revised downward from +64,000 down to +45,000, and July down from +163,000 to +141,000.
Separately, and a bright spot: the unemployment rate decreased from 8.3% to 8.1%, due to slightly lower labor force participation.
So why the widely divergent numbers between the ADP and BLS reports? I have no idea, but here's some thoughts:
First, the ADP report covers private, non-farm, seasonally-adjusted employment with a rotating sampling rate of 344,000 businesses; the BLS contains total non-farm including government employment, seasonally adjusted and NSA, but only surveys 160,000 groups (government agencies and businesses). For what it's worth, 7000 government jobs (SA) were lost in August, according to the BLS report.
Second, the household survey is based on total population over 16 years of age -- there is no upper age limit. While it might be true that people are discouraged and dropping out of the workforce, technically the drop in employment participation and the corresponding drop in unemployment rate may also be incorporating people of retirement age, who have simply stopped working completely, even if they wanted to continue to work -- something that will continue to grow as baby boomers exit the workforce.
Parting thought: When I look at CL ads, I don't see any drop in the number of job ads that I had seen earlier this year. There are a ton of job postings, including long lists under general labor. Demand is growing, so I think ADP's number reflects reality better than the BLS figure.
Any thoughts?
Notes: Read this on the BLS methodology; read this on ADP's methodology.
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