UBS: A tale of two surveys
Anybody hoping that the latest batch of economic data will provide a clear insight into the state of the US economy could find themselves sorely disappointed. The Fed may have declared that any future moves in interest rates will be data dependent, but with the data supporting both the hawks and the doves, debate among members of the FOMC could well be lively.09.02.2016 | 09:26 Uhr
You would think that more information is a good thing, but sometimes it just ends up bringing confusion. The US labor market report is a good example. There are two surveys: the establishment survey, which gives the familiar non-farm payrolls (NFP) measure of job growth, and the household survey, which is used to calculate the unemployment rate. In the most recent publication, the two surveys are giving conflicting messages.
The establishment survey, as its name suggests, asks non-farm businesses how many people they employ. Thehousehold survey asks a sample of households about the employment situation. The big difference is obviously that the household survey will include farms (inconsequential) and the self-employed (pretty big). The NFP number slowed down this month, and has decelerated over the last three months (chart 1), but the household survey is showing more and more employment growth. Its increase has actually been enough to push down the unemployment rate despite more people joining the labour force.