NEW YORK — As if it wasn't hard enough to get a fix on the job market these days, the surveys the government uses to measure employment are now telling two different stories.
One that focuses on businesses shows payrolls on the decline, while a monthly survey of households signals an improving labor climate.
That's making it a whole lot trickier to figure out where the economy's heading. Which will it be: jobless recovery that hurts the economic rebound or new job growth that fuels a bigger bounce?
"This may be saying that the job market may not be deteriorating any more and on balance could really be stabilizing," said Dan Laufenberg, chief U.S. economist at American Express Financial Advisors.
The Labor Department's establishment survey collects data from more than 400,000 individual U.S. work sites, representing about one-third of all employers. It is used to determine how many payroll jobs are being added or subtracted from the economy.
Missing from the survey are details on self-employed workers or start-up businesses, as well as farm employment. It also allows workers to be counted twice if they hold more than one job.
The household survey, also handled by the Labor Department to determine the unemployment rate, reaches 60,000 individuals. It includes anyone in the work force — employed or looking for work — and those who are unemployed.
While the payroll survey shows that 1.1 million jobs have been eliminated since the recovery began in November 2001, the household survey shows that employment is actually up by 1.4 million.
Payroll employment since January has declined by 600,000 jobs, while household employment has surged by 90,000 jobs.
Since the payroll survey doesn't track new firms, some economists believe it underestimates job growth. For instance, it takes into account people who have been laid off but doesn't recognize if they get work as consultants or contract workers.
"While I think the payroll survey overall is a better gauge because of its size, there are big problems with it when the economy is in transition," said Sophia Koropeckyi, an economist at Economy.com.
This isn't the first time that the two surveys have been out of sync.
House Budget Committee chief economist John Kitchen studied the performance of payroll employment during five previous economic recoveries. In each case, the government ended up eventually revising its payroll estimates.
Consider his study of the 1991 recession. Twenty months into the recovery, the government reported that payrolls had grown by 303,000, while household employment was up by 1.18 million. But after its final revisions, the payroll number was bumped up to 663,000, while the household survey's figures remained nearly the same at 1.19 million.
By applying historical precedents to today's situation, Kitchen estimates that payroll estimates could be revised up by roughly 500,000 to 700,000 from the end of the recession in 2001 through July of this year.
"The month-to-month changes may not be giving us as clear a signal of the condition of the economy and the labor market as we have thought," Kitchen said.
Still, many economists caution against comparing these two surveys, saying they aren't gauging the same thing.
Instead, they recommend adjusting the household survey by subtracting out several factors, including the change in self-employed, farm and private household workers and multiple jobholders. That will narrow the gap between the two.
They also question whether the household survey is the best gauge of improving labor trends.
Goldman, Sachs & Co. chief U.S. economist William Dudley pointed out in a recent note to clients that "workers who became 'consultants' after losing their jobs may not have much to do."
That could mean that, while they may be technically working, they aren't bringing in the same income they did before. There is also the issue of Americans who say that they are self-employed, when really they are just out there looking for work.
Of course, the hope is that the findings of the household survey turn out to be accurate.
Consumers have largely fueled the economy in recent years as companies restrained their buying. The worry is that they could soon start pulling back on their spending if the jobs outlook does not improve.
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