The state’s chief economist today cast doubts on recent unemployment numbers, calling into question the methodology used to collect the data.
Economist Charles Steindel said the unemployment numbers gathered through the household survey do not jibe with other data collected on state employment, including numbers from the payroll survey, which questions employers on the number of people on the payroll and was more optimistic on the job market.
“We think history shows pretty clearly that the payroll survey is right,” Steindel said, pointing out that the margin of error on the payroll survey is half what it is on the household survey. “This has been an issue over the past year, but it’s really in the past few months that we have seen the yawning chasm occur.”
Other elected officials, including those in Connecticut and New York City, have complained about the unemployment numbers, Steindel said.
The state’s unemployment rate rose to 9.9 percent in August, up from 9.8 percent. But during the month, payroll data showed the state gained 5,300 jobs, figures the administration of Gov. Chris Christie called “inexplicable.”
But Patrick O’Keefe, director of economic research at JH Cohn, questioned the state’s motive in criticizing the data.
“Like most data series they have their limits and those of who use them for non-political reasons accept those limits and work within the framework of them,” O’Keefe said.
What the numbers show, he said, is another month of poor performance in the job market, plain and simple.
In August, private sector employment increased by a meager 1,800 jobs,” he said. “And it appears that the largest proportion of the gain when you net everything out occurred in the sector of the economy that includes temporary help.”
As for the administration’s critique of the data, O’Keefe questioned why they did not include an independent source.
“It’s fairly common for the political reaction to unwelcome data to be a criticism of the source of the data,” he said. “What occurred to my mind is where is the authoritative critique of the (Bureau of Labor Statistics) methodology? Citing other complainants is hardly relying on an independent authority.”
And according to O’Keefe, the data may be worse than it looks. In August, 14,700 people dropped out of the labor force, likely over frustration over the job market, the economist said. But had they stayed, the state’s unemployment rate would have hit 10.3 percent.