What Accounts for the Growing Divergence between Employment Measures?

Our analysis reveals a significant and persistent divergence between employment measures from the Current Employment Statistics (CES) and Current Population Survey (CPS). Adjusting for the net birth-death contribution of businesses only partially explains this gap. The remaining large discrepancy is likely due to an underestimation of population growth in the CPS, potentially linked to recent immigration fluctuations. This finding has substantial implications for understanding the current labor market: adjusted CPS data reveals a more robust labor market with healthy demand and rapid supply growth from the beginning of 2023 to June 2024, contrasting with the unadjusted CPS data, which suggests only tepid demand growth. Our study underscores the importance of accurate estimates and continuing data revisions for informed policy decisions.

Keywords: Employment

JEL Classification: E24

Suggested Citation: Suggested Citation

Willis, Jonathan L. and Zha, Tao A., What Accounts for the Growing Divergence between Employment Measures? (August 1, 2024). FRB Atlanta Policy Hub Paper No. 2024-06, https://doi.org/10.29338/ph2024-06 , Available at SSRN: https://ssrn.com/abstract=5194511 or http://dx.doi.org/10.2139/ssrn.5194511