The economy added 339,000 jobs in May according to the establishment survey but the household survey showed a loss of 310,000 and a rise in the unemployment rate

Last Friday's post was on the unemployment rate and the percentage of 25-54 year olds employed. It might have seemed strange that reports were of jobs added but the unemployment rate jumped from 3.4% to 3.7%.

The reason for the discrepancy is that there are two surveys. The establishment survey is used for the Labor Department's monthly jobs report. They contact businesses for this survey. The household survey is used to put together the unemployment rate. The Bureau of Labor Statistics contacts households for this one.

Last year I did a post called The establishment survey and the household survey currently tell conflicting stories about unemployment. I quoted from an article by Jeffrey Sparshott of The WSJ. Here is part of that post:

"The conflicting employment data come from two different surveys—one of employers and one of households—used to calculate employment, unemployment and other key figures in the Labor Department’s monthly jobs report."

"Many economists consider the establishment survey more reliable—in part because the household survey has a smaller sample size and a larger margin of error. The two series tend to converge over time."

"The divergence is partly because the surveys define employment differently. The household survey, for example, includes workers in private households such as nannies or housekeepers, farmworkers and the self-employed, while the establishment survey doesn’t. Someone with two jobs is counted twice in the payroll survey, once in the household survey."

See also Comparing employment from the BLS household and payroll surveys from the BLS. and Payrolls rose 339,000 in May, much better than expected in resilient labor market by Jeff Cox of CNBC.