The Phantom Jobless

Catherine Rampell tries to explain the difference between two conflicting workforce estimates:

What explains a spike in unemployment in October alongside a relatively modest decline in employment during the same month?

It might be the self-employed, said Joseph Brusuelas, director at Moody’s Economy.com. Self-employed workers are not included in payroll (establishment) numbers, and the household survey data show that this group was hit particularly hard in the last month. Entrepreneurs may be doing especially badly because they are still having trouble getting financing for their businesses, Mr. Brusuelas said.

“Small businesses, start-ups and mid-size businesses the places more likely to be captured by the household survey, but not the establishment survey are not getting relief in the credit market,” he said. “This is perfectly illustrative of a recession caused by a financial crisis. Credit markets are healing but most of the companies benefiting are the larger companies.”