The BLS Household Survey released today reports 17.035 million employed Californians, finally exceeding its pre-recession peak of 17.023 million in January 2008.
The BLS Payroll Survey reports, 14.612 million non-farm payroll jobs, still 600,000 jobs below its pre-recession peak of 15.213 million in July 2007.
Overall, economists view the payroll survey as more reliable due to a larger sample and its annual benchmarking to full payroll tax records. However, they are different measures of employment (employed people versus jobs) and the household survey is more comprehensive in that it captures self-employment and agricultural work.
There are a couple of potential explanations for this divergence. Of course, one possibility is sampling error, and one must never forget we are dealing with preliminary estimates from surveys that are subject to revision as more data becomes available.
Other explanations are a structural shift in the California economy away from payroll jobs and towards self-employment. More people could be working as independent contractors rather than employees across a variety of different industries, and I have heard plenty of anecdotal stories to support that. Self-employment is more common in professional services which has been one of the strongest growing sectors in California for some time.
In addition, some of the traditionally biggest sectors for self-employment are construction and finance (particularly real estate related finance), so the faster growth in the household survey could reflect the growing impact of the real estate recovery on the job market.
Interestingly, the household survey measure of employment did not decline as much as payrolls during the recession even though construction and real estate was the hardest hit sector. That suggests that there is likely an on-going shift towards self-employment across sectors and the household survey is no getting a second boost from the real estate recovery.