A Moving Benchmark
To generate its monthly jobs estimates, the U.S. Bureau of Labor Statistics surveys non-farm employers subject to unemployment insurance taxation (virtually all) and then adjusts those numbers to reflect jobs created or destroyed by new and closing businesses. To verify the survey’s accuracy, the Bureau annually compares its survey data to actual unemployment insurance tax records for the month of March.
Normally, there is very little discrepancy between the two, but this year, a wide gap appears to exist due to less job creation at new firms and more job destruction at closing ones.
Specifically, the revision found that the economy shed 824,000 more jobs between March and 2008 and March 2009 than first reported. This means that jobs losses during the first half of 2008 were occurring at a rate three times greater than the reported one.
Moreover, the now eight million jobs that have been lost since December 2007 are equal to 5.8 percent of all the non-farm jobs that existed in the country prior to the recession. In percentage terms, this is the greatest contraction in employment than has occurred in all but one recession since 1939.