WASHINGTON –- Early released job statistics suggested that employment grew at a strong rate in late 2006, but data recently released by the Bureau of Labor Statistics for the third quarter of 2006 indicate otherwise.

Not only that, the data included in a quarterly report titled "Business Employment Dynamics” show that many small businesses, which had reportedly been in the lead in job creation, are now hurting. In fact, the Bureau of Labor Statistics’ numbers show companies with less than 50 employees lost workers in the third quarter, while larger firms kept hiring, albeit at a slower pace than before.

In addition, 8,000 more businesses closed than opened in the third quarter 2006. That makes it the worst quarter based on that measure since the third quarter of 2001 when an economy already in a recession was further hit by the 9-11 terrorist attacks.

According to one news source, the data included in the quarterly report comes from reviewing employment at every company in the U.S. that’s subject to state unemployment compensation laws. By that measure, private-sector employment gained only 19,000 jobs in the quarter.

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But the data from the bureau’s monthly survey of employers concluded that the quarter had a net gain in private-sector jobs of 498,000. That led economist to conclude that employment growth was holding up well even though the overall economy had slowed to an annual rate of just 2 percent.

What accounts for the huge discrepancy?

The difference, said the news source, was in construction employment. The quarterly study found it contracted by 77,000 jobs in the quarter, while the monthly survey showed an increase of 34,000 jobs.

A spokesman for the section of the bureau that deals with current employment statistics reportedly said the monthly numbers will eventually be revised to reflect the results of the quarterly survey, but that won’t happen until data is available for the fourth quarter of last year and the first quarter of 2007.

When that happens, an economist said he thought the third quarter would prove to be an inflection point in the economy and that the end result would be a substantial reduction in earlier employment estimates.

However, the news source noted, it will not be until next February that the monthly numbers are revised in the next benchmark revision and we may learn that the job market wasn’t as strong as it seemed to be in late 2006 and early 2007.

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