In Real Time, Does a Downturn in Household Survey Employment Better Presage a Recession than One in the Establishment Survey?

Here’s the current situation:

Figure 1: Civilian employment over age 16 (blue, left log scale), nonfarm payroll employment (tan, right log scale), both in 1000’s, seasonally adjusted, both as of 10/4/2024. Source: BLS via FRED. 

The arrows denote local peaks. Note there are two for the household series; the 2023M11 observation is only 2000 higher than the 2024M09 figure. Taking the September figure as the local peak, there is little suggestion that a NBER-peak has occurred.

And here are the (real-time) depictions of the household and establishment series around recession dates for the previous four recessions.

Figure 2: Civilian employment over age 16 (blue, left log scale), nonfarm payroll employment (tan, right log scale), both in 1000’s, seasonally adjusted, both as of 6/7/1990. NBER defined peak-to-trough recession dates shaded gray. Source: BLS via ALFRED, NBER.

Figure 3: Civilian employment over age 16 (blue, left log scale), nonfarm payroll employment (tan, right log scale), both in 1000’s, seasonally adjusted, both as of 5/4/2001. NBER defined peak-to-trough recession dates shaded gray. Source: BLS via ALFRED, NBER.

Figure 4: Civilian employment over age 16 (blue, left log scale), nonfarm payroll employment (tan, right log scale), both in 1000’s, seasonally adjusted, both as of 2/1/2008. NBER defined peak-to-trough recession dates shaded gray. Source: BLS via ALFRED, NBER.

Figure 5: Civilian employment over age 16 (blue, left log scale), nonfarm payroll employment (tan, right log scale), both in 1000’s, seasonally adjusted, both as of 4/3/2020. NBER defined peak-to-trough recession dates shaded gray. Source: BLS via ALFRED, NBER.

In real time, the household series turns one month earlier than the establishment in two cases (2001, 2007), and twice the turning points are the same time (1990 and 2020). In the revisions, the civilian series peaks are moved earlier once (1990), and later by two months (2001). The NFP peak is moved later once (2001 recession).

I do not think one should take too much from the current flattening out of the household series, given the fact that there has likely been an undercounting the population, which has spilled onto the estimates of employment.

 

11 thoughts on “In Real Time, Does a Downturn in Household Survey Employment Better Presage a Recession than One in the Establishment Survey?”

    1. Moses Herzog

      Hahahaha!!!! I think Menzie said something “along these lines” before, But it bears repeating again, Which is why he does,

    3. Macroduck

      Figure 4. Yup. Three local maxima, ivs just one for the establishments seris. Which is kinda similar to Figure 1, except that we have no sign yet of a peak in the establishments series..

      The household series is noisy. One should never rely on a brief divergences from trend to declare a trend change, especially in as-yet unrevised data, but relying in a particularly noisy series when a less noisy, historically more reliable series is available is, well, it’s what lying liars do.

      1. pgl

        Let’s go back to 2002/3 when the Bush43 SLOW recovery was being hyped by our favorite liar – Lawrence Kudlow.

        There would be months when the Payroll Survey would show very small employment growth but the Household Survey reported change was higher for that particular. Kudlow would go on an on about how the Household Survey was the more reliable measure.

        But then a few months later, the situation would flip with the Payroll Survey being the higher reported increase. And right on cue – Kudlow would declare the Payroll Survey to be the reliable series.

        I wish I had access to my Angrybear posts where I would document what a two faced Klown Kudlow was.

  3. pgl

    As Julie Su of the Labor Department was trying to convey today’s news on Faux News, the reporter kept saying something about past reports having downward revisions so how can we trust THIS report? After all “wild gyrations” make BLS reports not trustworthy according to Ms. Faux New reporter. Su’s first mistake was appearing on Faux News. Her next mistake was not punching this reporter out. After all – we must be a massive recession according to Faux News. MAGA!

  4. Macroduck

    Off topic – a dab of Middle East diplomacy:

    https://www.reuters.com/world/middle-east/gulf-states-sought-reassure-iran-their-neutrality-iran-israel-conflict-sources-2024-10-03/

    The Sunni powers in the Middle East have told Iran that they aren’t taking sides in the conflict between Iran and Israel. That, by itself, could be explained as an effort to fend off Iranian-sponsored attacks on regional oil infrastructure. Tack on the Saudi Arabia foreign minister’s claim that Sausi Arabia wants to bring its lo g-standing conflict with Iran to an end, and something more profound may be shaping up:

    https://www.middleeasteye.net/news/iranian-foreign-minister-visits-beirut-gulf-states-declare-neutrality

  6. pgl

    “LFPR remained depressed in Sep, having flatlined below pre-pandemic level; one or two percentage points represents millions of workers in an economy as big as the US – this is a significant gap”

    I told you Antoni would spin this report as bad news! Never mind the fact that the employment to population rose from 60% to 60.2%. Never mind the fact that the employment to population ratio for 25-54 year olds is 80.9% which is above where it was under Trump at any time. Antoni finds ONE statistic to cherry pick and misrepresent.

    Good boy EJ! Trump will give you your bone now!

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