With all of the Welching and conspiratorial burbling that exploded on the scene immediately after the Bureau of Labor Statistics released their near-sunny jobs report, it was easy to lose sight of one salient fact: the BLS might have actually under-counted the increase in jobs, specifically concerning small businesses. Matt Yglesias writes:
It should come as no surprise that despite the job counters’ best estimates, the results are not incredibly accurate. In fact, the “margin of error” on initial number is about 100,000 jobs. On average, the two rounds of revisions that occur in the two months after the initial numberlead to a change of a bit over 50,000 jobs relative to the initial estimate.
There’s considerable reason to think that the economy is growing a bit stronger than the official data reflects, and that summertime job growth was stronger than the BLS knew. The main reason for this is that in addition to standard statistical error, the BLS’s “establishment survey”—the poll of employers that forms the basis for the canonical jobs number—seems to feature systematically correlated errors. In particular, when employment is shrinking it undercounts the pace of the shrinkage and when employment is rising it undercounts job growth.