Heritage Foundation’s EJ Antoni has been describing the gap between the establishment NFP series and the CPS employment series as the basis for evidence of mismeasurement of employment by the CES. Goldman Sachs notes today (Peng, “Revised Immigration Estimates Will Close Much of the Payroll-Household Employment Growth Gap in January”) that new Census estimates of immigration will imply a big revision in population controls used in the CPS employment series.
Source: Peng, “US Daily: Revised Immigration Estimates Will Close Much of the Payroll-Household Employment Growth Gap in January,” US Daily, Goldman Sachs, 14 January 2025.
By my calculations on what they report, I was pretty much on the mark for what the revised CPS adjusted to NFP concept series would look like through mid-2024 (I didn’t have the CBO estimates for July 2024-June 2025 at that time). The revised CPS series adjusted to NFP concept should be moved up to roughly where the preliminary benchmark implied NFP is in December.
Figure 1: CES Nonfarm payroll (NFP) employment series (black), implied preliminary benchmark CES NFP (gray), CPS employment adjusted to NFP concept (green), and Goldman Sachs implied revision for December (light green square), all in 000’s, on a log scale. Source: BLS via FRED, BLS, Goldman Sachs, and author’s calculations.
Hence, the majority (3/4) of the gap between the CES and the adjusted CPS series is due to a difference in estimated population controls, with the remainder of the gap essentially accounted for by the overcount in the NFP.