Dean Baker Thinks About the Job Numbers

He is somewhat worried. The BLS establishment survey has to guess at the number of jobs created in new businesses that aren't yet in its sample, and that makes it likely to miss economic turning points:

Beat the Press: Dean Baker's commentary on economic reporting: Job Numbers for Nerds (and Good Reporters)

As has been widely reported, the July job numbers came in somewhat weaker than expected, with job growth of just 113,000.... However, the actual picture may be somewhat worse.... [T]he Bureau of Labor Statistics (BLS) may be imputing too many jobs into the survey for new firms that are not included in their sample.

The... BLS knows that there are firms that cannot be counted in its establishment survey.... BLS must therefore impute some number of jobs for these new firms.... The problem is that the imputation will miss turning points.... In 2001, the imputation led to an overstatement of more than 400,000 jobs, an effect noted by astute observers at the time.

Is the imputation overstating job growth now?... We won’t know... until BLS releases it benchmark revisions next fall...