"Stipp: Bob, I want to talk a little bit about the unemployment rate, and this is calculated off of a separate survey, the household survey. There is also employment data in there as well, that they used to calculate that rate. How does that compare with the establishment survey, which is the number of jobs added that everyone takes a look at.
Johnson: The gold standard is considered the establishment survey, because [it is] actual payroll data that's turned in by corporations; it misses certain self-employed workers, and they have to take into account they can't reach certain businesses, and what do you assume about the businesses that don't answer back? Did they go out of business or just get lost in the mail, so to speak.
So there are a lot of adjustments in there, but less so to worry about then on the household survey, where they actually call up and say, do you have a job? And of course a lot of time you call somebody on the phone, and he'll say, yeah of course I have a job. If some stranger calls and says, are you working? Your first response isn't, no, I'm out, and I'm a bum. And so they always question this report a little bit, but the two over time do kind of move together eventually. The households survey had been better than the establishment survey for the last two or three months.
Now this month the household survey actually showed that employment went down by a couple of hundred thousand people even. That's why the unemployment rate went up. They count jobs two different ways. So that's what happened this month with that statistic.
Stipp: So there could be a little bit of noise in there if that statistic had been running ahead the last few months, maybe little bit of correction there. Vishnu, do you think underlying in the fundamentals, though, that unemployment rate ticking up is a bad sign or is this not significant, in effect that it just ticked up a tenth of a percent.
Lekraj: Well, it makes sense, because you need 250,000 job growth on nonfarm, the establishment survey side, in order to see any material movement from the household survey. We havent been doing that. So it's understandable the rate is a little bit flat or a little bit higher. There's nothing to get very worried about, but at an 8% unemployment rate that's averaged over this year, it's not good. We need to bring that down and hopefully that will happen over the next six months."
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