Resolving the Payroll-vs.-Household Debate

Since the future is unknowable, the best we can do is make imperfect predictions based upon what we know at present. I give other analysts and strategists leeway when their conjectures prove incorrect -- as long as their models are rigorous and their intentions sincere. Call it the rule of "cutting the other guy some slack."

I have, however, no tolerance for erroneous economic expectations based upon faulty data, hidden agendas or personal biases. We saw examples of this during the heyday of the bubble years, when analysts regularly skewed their research in order to serve their investment banker masters, much to the detriment of investors.

This most recent episode with the household/payroll surveys has been similarly disingenuous.

To quote John Irons, senior economic research and policy analyst at OMB Watch, a Washington, D.C., nonprofit: "The [fastest] way to lose all economic credibility is to claim that either, one, the household survey is a better measure of employment than the payroll survey, or two, that 'economists disagree' about which survey should be used."

I couldn't agree more.

My research assistant Julie Heckman, soon to be heading back to Cornell, provided invaluable help with this column.