By M.D. Kittle | Wisconsin Reporter
MADISON – Wisconsin’s economy shed 6,500 nonfarm jobs last month, according to the latest data from the Wisconsin Department of Workforce Development, as measured by the federal Bureau of Labor Statistics.
Consequently, Wisconsin’s July jobless rate rose to 7.3 percent, from 7 percent in June.
Of course, there’s a good chance the numbers are crap.
Well, that’s not exactly how DWD Chief of the Office of Economic Advisors Dennis Winters put it. But he did say the BLS monthly measurements are effectively useless.
“That’s what I’m considering them at the moment,” Winter told Wisconsin Reporter. Until BLS changes its monthly measurement, proven to be volatile at best and consistently wrong in general, he said he won’t “have a lot of faith in them.”
There hasn’t been one month this year the estimates haven’t been off – several times significantly.
In March, for instance, the monthly employment estimate showed Wisconsin’s economy lost 4,500 nonfarm jobs. Revised numbers showed a 2,800-job increase, a swing of 7,300 jobs.
On the other side of the equation, BLS reported nonfarm estimates showed a preliminary increase of 12,500 jobs, but the revised figures pegged the increase at 5,200 – again, a difference of 7,300 jobs.
The problem continues to be the size of the workforce survey universe.
The BLS monthly place of work data, known as the Current Employment Statistic, or CES, is based on a monthly survey of about 5,500 Wisconsin employers, representing 3.5 percent of employers.
DWD and BLS will tell you the more accurate measure is the Quarterly Census of Employment and Wages report – the latest showing Wisconsin added 37,464 private-sector between the first three months of 2011 and the first quarter of 2012.
Manufacturing led the way, adding 12,088 jobs between March 2011 and March 2012. Important to note, too, that wages grew by 7.16 percent.
The quarterly report is based on a census of about 96 percent of Wisconsin employers – about 160,000 employers compared to 5,500 businesses in the monthly gauge.
The 37,000 jobs’ gain still is a long way from Gov. Scott Walker’s ambitious pledge to create 250,000 jobs over his term, but it’s a lot brighter economic picture then the net loss of 11,300 jobs in BLS’ monthly estimates.
So why does BLS still use the monthly estimates?
Mainly, the preliminary reports are driven by the public’s desire to know the latest employment information. BLS economists have told Wisconsin Reporter that the data, relatively speaking, is not off by that much. That’s true, in an economy of nearly 3 million workers.
But for displaced workers, there’s a vast difference between 5,000 jobs lost or 2,000 jobs gained. Certainly there is in divisive Wisconsin politics, where minority Democrats have jumped all over monthly reports of job losses as evidence of Walker’s failed leadership, and Republicans have danced all over monthly gains as proof of economic momentum.
“I view the monthly numbers with suspicion at the very least, and often outright disbelief,” Winter said.
So does his boss, Workforce Development Secretary Reggie Newson, who last month wrote BLS Acting Commissioner John Galvin a letter “urgently” requesting reconsidering use of the Current Employment Statistics data in benchmarking employment figures.
He said there is too much at stake in being wrong.
“From the college graduate contemplating which state to launch a career to the business owner analyzing whether to expand at home or elsewhere, people across our state and nation are making major life decisions based on this information and, collectively, these decisions have an impact on our overall economy,” Newson wrote.
Winters said the disparity in employment figures puts labor economists at a disadvantage, making timely, accurate labor-market reporting a challenge.
“One of the indicators we looked at, now we can’t use it,” he said. “Now we’re looking at job numbers six months back, and that puts us at a bit of a bind.”
The monthly numbers weren’t always so volatile, Workforce Development officials said. The big swings began last year.
Other indicators show signs of economic growth— not necessarily robust, but growth nonetheless.
The latest first-time unemployment claims are down 13.7 percent from the same time last year.
New business formation was up by 8.8 percent through the first six months of the year compared to the same period last year, according the state Department of Financial Institutions
And individual income tax revenue collections were up by more than 4.3 percent through May, according to the state Department of Revenue.
“I’m more optimistic than I’ve been in a while,” Winters said of the state’s economy.
Email Kittle at email@example.com