How many jobs were REALLY created in August?

Last week there were two very divergent estimates of the number of new jobs created in August.  The most widely reported number came from the Bureau of Labor Statistics that estimated 96,000 new jobs.  ADP National Employment Report reported that 201,000 new jobs were created.  Quite a large discrepancy and which one should we believe?

Friday I talked with Joel Prakken, chairman of Macroeconomic Advisers that produces the data and analysis for the ADP report. (Listen to the interview here.)  

Mr. Prakken told me that the two reports come from different samples of businesses. The Bureau of Labor Statistics draws a sample of about a half a million businesses to receive its survey which is then filled out by someone (who knows who) in the businesses.  ADP surveys a similar number of its clients and actually uses a computerized count of names on the payrolls.

Mr. Prakken obviously believes that his numbers are more accurate but says that the two employment projections correlate up to 95% over time. 

Unfortunately the vastly different projections come at a time when the media and voters are paying close attention.  Mr. Prakken disagreed with my assertion that almost all the media primarily reports the Bureau of Labor Statistics numbers but the proof is in the headlines.  It is the 96,000 new jobs figure that is impacting the presidential election. 

My wish would be that the media and politicians look within the ADP report and talk about small businesses doing more than their fair share in creating new jobs—49% created by businesses with under 50 employees.  Since I and many others define a small business as one with less than 100 workers, it is clear that just like every other month this year over 50% of the new jobs created in August came from small business.

That was my prediction I made to Neil Cavuto when I appeared on his Fox Business News show just before 9 PM last Thursday night live from the Democratic National Convention. 

My prediction for September is that small businesses will again outperform every other category in creating new jobs.

Buffett Rule trumped by filibuster rule

In spite of a majority of Senators voting to pass the Buffett Rule creating a minimum tax rate for those making over a million a year, the bill failed.  Along an almost straight party line vote, the Buffett rule did not muster the 60 votes needed to stop a potential filibuster.

With 60%of the public and 57% of small business owners supporting a minimum tax rate on incomes over a million a year, the nation’s wealthiest can sleep well this tax day knowing that the our federal tax inequality is safe, at least for now.  

But the executive director of Center for Community Change, Deepak Bhargava, says in an opinion editorial in The Hill’s Congress Blog today that a tax revolt 2.0 is brewing.  According to Mr. Bhargava, the old Grover Norquist-style tax revolt has passed “like the Cold War or the fax machine.” 

Well, just like I still sometimes use a fax machine, the “never-raise-taxes” revolt is not completely dead.

Yesterday I participated in the national Buffett Rule battle and appeared for a live cut-in on Fox Business News. (No, Hell hasn’t frozen over but Fox did fail to identify me as the Vice-Chair of the American Sustainable Business Council even though that is how I received the invite.)

You can see the clip here. 

Now on to House Majority Leader Cantor’s bill to cut small business taxes on profit by 20% with the absurd prediction that this will inspire job creation.  More on this tomorrow.