The BLS Employment Situation was released today, indicating a job increase that exceeded the expectations of the consensus forecast. This information is based on a survey of employers. The 163 thousand job increase over June contrasts with the Bloomberg median consensus of 100 thousand and our forecast of 80 thousand. It is the most rapid job growth since February. The stock market has responded by rising about 2 percent thus far today.

While the increase in jobs is good news, the Employment Situation also contains a separate survey of households. This is where the unemployment rate data come from. (Note the terminology here: “jobs” come from the employer survey and “employment” comes from the household survey). From this survey, we see that both the July labor force and employment contracted, but the employment contracted a bit more, resulting in a slight unemployment rate rise from 8.22 percent to 8.25 percent. While the 8.25 rounds to 8.3 it was not a rise in the unemployment rate of a tenth, but rather only three hundreths.

For many months now, the employer survey and the household survey have been disentangled, which is not the historical norm. For a few months now the household survey has indicated an employment gain greater than the job gain. For July, the relation switched … employment fell almost 200 thousand jobs while jobs gained 136 thousand jobs!

What might the reasons for the discrepancy between the jobs and employment data, which are each trying to measure essentially the same thing? The jobs data might miss people who are working part-time and or on their own (in their garage). Employers might report only full-time positions. Households might say they are working, if they are doing part-time or under the table work from their home or from an office shared with someone else, that would not get picked up by the Employer survey.

The July result is harder to explain. But it indicates that people are responding to the question: “are you working” with a “no” more than in June. If they had been doing part-time work or under the table work perhaps that has ended, and they are back to looking for that elusive full-time job.

Whatever the reason, todays Employment Situation has more good news than bad.