The Household Survey Keeps Fed Action in the Picture

Some of the dumber stuff I’ve come into contact today was of the “good news from jobs is bad because it means the Fed won’t do anything” variety.

The Economix blog at NYT explains that the Fed actually watches the Household Survey more than the BLS’s non-farm payrolls (although both are on the radar).  And the Household Survey is not quite saying what the NFP number is.

Even so, the Fed measures its mandate more in terms of the household survey than the payroll survey, my colleague Binyamin Appelbaum (who covers the Fed) tells me, because the household survey measures workers rather than jobs and includes a broader range of occupations.

For example, the household survey includes workers who are self-employed, and the payroll survey does not.

The household survey is also more likely to capture job growth that is being created by new businesses, which are relatively unlikely to be included in payroll surveys since the Labor Department doesn’t know they exist yet.

Even given the household survey’s expected volatility, the unemployment rate has remained remarkably consistent since January. That steady rate of around 8.2 percent is also at the upper end of the central tendency that the Fed reported in its June forecast for economic conditions this year.

In other words, the Fed is not relaxed at all by today’s 163k new jobs number.

Click over for more on this from Catherine Rampell…


What the Jobs Numbers Mean for Fed Policy (Economix)







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