National job numbers for December paint a confusing picture: One job survey showed a rather modest increase in employment, but the other survey indicated a major decline in the unemployment rate. N.C. State University economist Mike Walden clarifies the findings.
“There are two job surveys every month. One survey … showed a job increase of about 100,000 jobs; this is the so-called payroll survey; 100,000 is certainly good, but it is actually much smaller than the 200,000 that we really need to make good progress on unemployment.
“However, the second survey — the so-called household survey — where the surveyors go to where people live and ask them questions about whether they are working or not …. showed an increase of 300,000 jobs. It showed a decline in the unemployment rate from 9.8 to 9.4 percent. But on the negative side, it also showed that a .25 million people who had been unemployed and counted as unemployed stopped looking for work and, therefore, not in the unemployment rate. And that is one reason why we had that pretty significant decline in the unemployment rate.
“What does all this mean? Well, I think it means, number one, we are making progress on the labor market. We are adding jobs. In fact, over the last year at the national level we have added over 1 million jobs. But the gain is really slow. You have to remember we lost 8 million jobs during this recession. So we added 1 million over like the last 14 months. It is going to take a long time to get back to normal.”