• By
  • Phil Izzo


AFP/Getty Images
One of the thousands of workers hired for the 2010 census.



Such a large jump in jobs is undoubtedly good news for the economy. Still, the census boost can confuse the outlook for the broader labor market. Because temporary jobs often become full-time jobs, economists tend to look at the temporary help services sector – which has added 330,000 jobs since September 2009 – as a leading indicator of the broader job market. The census jobs, however, are by their nature short-term, without any hope of becoming full-time positions.

Further confusing the issue may be the unemployment rate. Despite the big jump in jobs, economists surveyed by Dow Jones Newswires only expect the rate to fall slightly in May to 9.8% from the 9.9% recorded in April. Payrolls and the unemployment rate are calculated using different surveys and can often move in different directions at turning points in the labor market.

The jobs number is calculated using a survey of businesses, called the establishment survey. The businesses report the number of workers that they had on their payrolls during the survey week. The difference between the total number of workers on payrolls in the current month compared to the previous month is reported as the number of jobs lost or gained during the period. The figure just represents the number of jobs in the economy, not the number of people employed. For example, if one person holds two jobs both of those jobs are counted in the establishment survey.

The unemployment rate is calculated in a separate survey of individuals, called the household survey. In that survey people are asked whether they worked during the survey week. The unemployment rate is calculated by dividing the number of people who say they are unemployed by the total number of people in the labor force. The number can go up, even if the overall environment for jobs is improving. When people re-enter the market to begin a job hunt again, they boost the number of the unemployed until they find a new position. At the same time, the rate can decline or stagnate when the labor market is bad and people get discouraged and drop out of the labor force.

Despite this confusion, the trend in the labor market appears clear. Even absent census workers, the number of jobs in the economy is increasing and the number of people who say they are employed is rising. To be sure, the pace of recovery is still muted and it’s going to take a much higher level of job creation to eat up all the slack created by the recession. But right now, the arrow at least appears to be pointing in the right direction.



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