But we don’t refer to employment because of technical issues with our employment data, making them difficult to interpret. For example, despite the negative GDP growth in the first quarter of the year, the Quarterly Employment Survey told us that the economy had created an extra 49 000 jobs. That was probably not a signal the economy was picking up.
Unfortunately, the data throw up these kinds of puzzles all the time, making it hard to rely on them as guides for monetary policy. At a more fundamental level, it doesn’t make much difference if we use growth or employment in our Taylor rule, a point made by academics assessing our policy decisions.