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The unemployment rate, which is obtained from a separate household survey

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The unemployment rate, which is obtained from a separate household survey, fell to 9.0% last month signaling that 700K more people were employed. Yet, another study by the government stated that non-farm payrolls rose only by 50K.

Which of the following best settles the dichotomy presented in the passage above?
A. Because of bad weather, a number of people got temporary jobs and did not report as unemployed.
B. About 75% of the job positions in companies are filled through references and not made public.
C. Governments of a few states are in the process of shedding jobs that have not reflected on the unemployment rate
D. International corporations have stepped up hiring for their subsidies in US.
E.The unemployment rate is the national benchmark on which the economic policy is decided and is considered the most accurate estimate.

Official Answer

2 Answers

Priyank Shrivastava
I used this approach:
UR decreases to 9% (as indicated by a household survey) --> 700K jobs added.                                         Govt survey, non farm jobs --> only 50K.                                                                                 Descrepancy: Either hh survey is not correct or govt survey is not correct.
(A) Seems the HH survey was not correct. Lets keep this                                                                           (B) says 3/4th jobs are not reported. means 1/4th reported by companies. Lets keep this as well.
(C) Gove  are in process of shedding job. It is not certain whether the jobs will be completely removed or not. So doesn't gives a clear indication that HH survey is flawed.
(A) & (B): (B) talks about 3/4 jobs not reported, only 1/4th jobs reported. Not mentioned whether jobs were inceased or decreased. We are looking for info that proves either of the survey is wrong. So leave this out
(A) is correct. It clearly indicates a flaw in the HH survey for unemployment rate
answered May 21, 2015 by Partner (785 points)
Meenakshi Jain
Here is my approach to this answer. We are asked to resolve the paradox that one study has reported that 700K ppl are employed but study 2 says that non-farm payroll jobs have increased only 50K. There is something missing because this way the numbers do not match. Maybe someone is not reporting that data correctly or there is some point of difference. Let us examine answer choices.
A) Looks probable, but let us wait
B) OKay if they are filled thru references. Does not resolve the paradox.
The answer should be A
answered Apr 29, 2015 by Senior Associate (452 points)
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