When do more jobs = less jobs? When it's Wisconsin in the summer!

It's been interesting comparing the alarmist Journal-Sentinel headlines on jobs compared to the actual employment data from the Wisconsin Department of Workforce Development. Today, the DWD released figures that indicated the state added 22,500 jobs in June 2010 (see page 3). Sounds like great news, but the Journal-Sentinel headline blared that the 5,100 jobs lost in the Milwaukee MSA in June. But wait, if you see Page 2, it also says that the Milwaukee area ADDED 1,300 jobs last month. So what gives?

The answer is seasonal employment patterns. Lots of people enter the workforce in early Summer, especially students looking for Summer jobs, migrant workers, and tourist-related jobs. So it is expected that a lot of jobs and job-seekers will be added. The result is seasonally-adjusted figures that try to smooth out these changes, to get a more accurate feel for how employmnent is going.

But does it? As this article and many others note, teen employment has gone way down the last couple of years. This is the group that would be very likely to get Summer jobs and be part of the employment market in big numbers this time of the year. If they aren't being hired, then the expected bump in employment would not exist resulting in a "loss" of jobs in the seasonally-adjusted figures despite more people working in the real world. It also means they may be more likely to stay at home or go to Summer School instead of get a job, which means they wouldn't show up in the work force at all. And the Wisconsin seasonally adjusted figures show big drops in both unemployment and work force, which would correlate with this theory of teens/ college students not being hired.

Take a look at the June figures again and compare them with the March ones , it says 91,200 more people are working in the last 3 months, and that the unadjusted unemployment rate plummeted from 9.8% to 8.1%. If you looked at those numbers, you'd figure the economy was booming. It's not, because seasonal adjustment tells you employment should rise with the temperatures that time of the year, but even the seasonally-adjusted rates in Wisconsin are going down.

June 2009 8.9%
March 2010 8.8%
June 2010 7.9%

But did the Journal-Sentinel mention this 1.0% decrease in unemployment to a level 1.6% below the U.S. rate? Uhh, not exactly. While they may have a point that a lower rate due to lower participation in the work force is a sort of "tallest midget" award, the overwhelming negativity of the JS articles tell me that they're more interested in giving Charles Sykes some material for the next day's show instead of reporting what's really happening in the job market.

Last point- given that the low levels of teen employment are skewing the employment numbers down for the Summer, does that mean that the seasonal jobs figures start going UP once August and September roll around, and there are no Summer jobs to lose. The seasonal adjustment would expect a large drop in employment, and if it doesn't happen, then there would be a large "increase" in the seasonally adjusted job figure merely by staying even in those sectors. Let's see if there are some suprises to the upside coming as we get closer to election time...and see how the Journal-Sentinel spins it when it happens.