Job

The Job market is considered the biggest indicator of the health of any economy and one of the most important determinants of economic policymaking. Now the most important question comes what do you do when it's unclear how the Job market is doing? That's a question U.S. economists are asking as data and anecdotal information on the labor market increasingly tell different stories.

For example, a survey by the Labor Department of businesses showed there were 62,000 fewer Jobs in December 2003 from a year ago. But a door-to-door survey of households showed there were 1.957 million more Jobs in December from the prior year. Other data from private surveys only increase the confusion.

According to Ethan Harris, chief U.S. economist at Lehman Bros, "I don't think there's been a time in modern history for the U.S. that we've had this big of a discrepancy in the employment statistics". It's an important issue for policymakers. Federal Reserve officials have said they will raise interest rates when the Job market shows distinct improvement. Not knowing when that happens makes their Job that much tougher.

The Fed suggested they were questioning the official employment data, as well. While saying hiring was "subdued," they said, "Other indicators suggest an improvement in the Job market."

One of those indicators has been the weekly applications for state unemployment benefits. The Labor Department said applications for jobless benefits fell 1,000 last week of Jan 2004 to 342,000, the lowest level this year and down more than 60,000 from just four months ago. That would suggest layoffs are falling.

But the most closely watched indicator of the Job market, the government's monthly survey of 160,000 firms and government agencies, has painted a picture of a continuously weak labor market. In December, only 1,000 jobs were added, according to the survey. Households, however, have been saying Jobs are increasing.

Some question if the business numbers are accurate, arguing that the survey does not capture increases in hiring at small firms or expansions in those who are self-employed and contract workers. When the job market has been struggling, more people such as Matthew Zoks, 30, of Rockville, Md., turn to that kind of work. Zoks became a contract worker after being laid off from his computer software development job in June.

Don Rissmiller of International Strategy and Investment said, "There's a barrage of evidence that employment could be better than the payroll data suggest”.