US Treasury Secretary John Snow told a North Dakota radio interviewer Wednesday that the DoL report may have understated jobs growth (See December Job-Creation Prediction: 130,000; DoL Data: 1,000 ), Reuters reported.
“There is a big error factor in those numbers … and I think they may well have understated and we will see a restatement in the future,” Snow told WDAY radio station. “There is some question about the accuracy of these statistics.” The report also showed the unemployment rate dropped to 5.7%.
The non-farm payrolls number and the jobless rate are from different sources. The rate is generated by a household survey while the payrolls number comes from employer data. “Nobody can really reconcile those two surveys,” Snow said. The only reason the December jobless rate fell, say many job market watchers, is because 309,000 people got too discouraged about looking for a new job and dropped out of the workforce entirely.
Some economists have argued the household survey is a more accurate gauge of the turning point between an improving and worsening labor market.
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