The Bureau of Labor Statistics (BLS) and the Institute for Supply Management (ISM) have officially responded to accusations that the massive divergence in their March service-sector employment data exposes a fundamental flaw in U.S. economic reporting.
Both agencies are pushing back against claims by top economist David Rosenberg that their widely conflicting employment reports “can’t be right.”
Counting Jobs Vs. Measuring Sentiment
The agencies told Benzinga that the massive gap—which Rosenberg dubbed the “best month” versus the “worst month” for service-sector employment—is simply a matter of differing methodologies.
Stacey Standish of the BLS Press Office noted that “procedural differences in how surveys are conducted can understandably lead to different estimates of employment.”
Kristina M. Cahill, Manager of ISM Research & Analytics, echoed this, explaining, “The two statistics are measuring different things in different ways.” While the BLS rigorously estimates the total count of jobs using employer payroll records from a large sampling frame, the ISM Services Employment Index tracks relative sentiment from a curated panel of employers.
In March, the ISM index plunged to 45.2%. Cahill clarified that this simply means “more respondents reported employment decreasing than …
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