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Economist: Employment data “a mystery”

Anirban Basu, Chairman and CEO of Sage Policy Group, Inc.  (Maximilian Franz/The Daily Record.)

Anirban Basu, Chairman and CEO of Sage Policy Group, Inc. (Maximilian Franz/The Daily Record)

The nationwide employment data that Americans look to each month is raising questions among economists.

Maryland’s January jobs report, released Monday, showed that the number of jobs in the state dropped, but so did the unemployment rate.

This may be attributable to people dropping out of the job search process, as they only get the “unemployed” classification if they are actively looking for a job. But it could also be due to people finding work outside of the state of Maryland.

That’s because the number of jobs in the state is calculated with a survey of business establishments in the state, while unemployment is based on a survey of people who reside in the state but could be employed anywhere.

The household and establishment data are both important, the Bureau of Labor Statistics says on its website, because each set provides data the other cannot.

However, they have recently been a source of increased uncertainty, said Anirban Basu, chairman and CEO of Sage Policy Group Inc.

“A lot of us economists question the quality of this data these days,” he said, because the establishment and household surveys have increasingly conflicting results. “It’s a mystery why the data appear to be somewhat less reliable than they used to.”

There has been discussion in the field about ways to improve the data, he said, but no conclusive solutions.

“You almost have to decide which survey you’re going to pay attention to,” he said. “Thankfully there’s other sources of data… At the end of the day, usually there’s enough data to tell the story.”