Thursday, May 17, 2018

Wisconsin with record April....and job loss. Be skeptical

The third Thursday of the month usually means a new Wisconsin jobs report, and sure enough, it gave our Governor a talking point on his re-election campaign.

Here are the toplines from the press release from the Wisconsin Department of Workforce Development, and I’ll italicize one bit of news that is likely as buried in your local press as it is in this report from Scott Walker’s Department of Workforce Development.
Place of Residence Data: Wisconsin's preliminary seasonally adjusted unemployment rate for April 2018 was 2.8 percent, a decline of 0.1 percent from the March rate of 2.9 percent. The April decline is the 3rd straight month that Wisconsin's unemployment rate has declined or stayed the same. Wisconsin's labor force participation rate also increased over the month by 0.2 percent to 68.9 percent. The number of people employed in Wisconsin also increased by 8,100 people setting a new record for the state with 3,086,100 individuals employed. The year over year increase of 42,700 people employed is statistically significant according to BLS methodology.

•Place of Work Data: Based on preliminary data, Wisconsin has gained 11,000 total non-farm jobs and 8,800 private sector jobs over the last three months. Over the month, Wisconsin's total non-farm job number declined by 1,000, and private sector jobs declined by 3,100. Over the year, Wisconsin has gained 27,900 total non-farm jobs and 26,100 private sector jobs, including a statistically significant 13,700 manufacturing jobs according to BLS.
We lost 3,100 private sector jobs last month? Seems kind of important, and we also had March’s private sector jobs total revised down by 700. Granted, some of that can be explained away by the record snows for April (the biggest job “losses” were in Construction, which lost 2,000 jobs on a seasonally-adjusted basis despite having 6,400 more people working overall).

But likewise, the household survey which lists the “record 2.8% unemployment” counted +7,000 in the work force on a seasonally-adjusted basis, while actually having -6,900 for the non-seasonal figure. Seems odd that you’d expect more people to be working in April, but also expect fewer people in the work force at the same time.

Those figures also go with DWD reports which show that unlike the rest of the country, the Walker DWD claims more Wisconsinites are looking for work than at the end of 2017, and even more found jobs in the first 4 months of this year.

Wisconsin household survey, Apr 2018 vs Dec 2017
“Employed” +28,700
Labor Force +17,300

The payrolls part of the report (which gives total jobs) isn't as strong, but is still pretty good.

Wisconsin payrolls survey, Apr 2018 vs Dec 2017
Change in all jobs +19,200
Change in private jobs +15,900

If those numbers are accurate, it seems like things are going great in Wisconsin, and you can choose to believe that if you want. But past history shows that these gains will likely be lowered once they are subjected to the “gold standard”- the Quarterly Census on Employment and Wages (QCEW).

We saw this same routine last year, where Walker’s DWD was claiming that the jobs market was off to a roaring starting in 2017, and it turned out not to be the case.

Change in all jobs Dec 2016-Apr 2017
Walker DWD +27,600
Revised total +11,200

Change in private jobs Dec 2016-Apr 2017
Walker DWD +27,000
Revised total +14,900

Change in “Employed” Dec 2016-Apr 2017
Walker DWD +58,800
Revised total +22,200

Change in Labor Force Dec 2016-Apr 2017
Walker DWD +32,400
Revised total +10,900

With that in mind, take a look at what the DWD was spinning reporting this time last year.
Place of work data: Based on preliminary data, the state added a significant 37,600 total non-farm jobs and a significant 29,300 private-sector jobs from April 2016 to April 2017. Wisconsin also added 7,500 private sector jobs and a significant 14,800 total non-farm jobs from March 2017 to April 2017. Other significant month-over-month gains include 5,100 jobs in Manufacturing.
However, when those figures were benchmarked to the “gold standard” report 2 months ago, the April numbers ended up being a lot smaller.

April 2017 Wisconsin jobs, DWD vs revision
April 2017 change in all jobs
Walker DWD +14,800
Revised total +400

April 2017 change in private jobs
Walker DWD +7,500
Revised total -2,100

Apr 2016-Apr 2017 change in all jobs
Walker DWD +37,600
Revised total +17,900

Apr 2016- Apr 2017 change in private jobs
Walker DWD +29,300
Revised total +21,600

In addition, who in their right mind believes over 50% of the state’s private sector job growth in the last 12 months has been in manufacturing – a sector that accounts for less than 1 in 5 private sector jobs? As recent history tells us, those alleged gains in manufacturing jobs are also not likely not hold up.

Interestingly, Walker’s DWD usually would include information on what they sent to the Bureau of Labor Statistics for that QCEW report along with the regular jobs report that came out today,a nd the tiem frame would show the year-end amounts for 2017. But that wasn’t in today’s press release, which reminded me that that they also hid those numbers this time last year. Why? So they could dump them on the Friday before Memorial Day because they revealed that 2016 had by far the worst job growth of any year Walker has been in office.

Will we see another bad performance for 2017, with another year of job growth below 1%? Figures that we’ve seen so far from the QCEW make that seem likely.

So will we see Walker’s DWD pull another pre-Holiday weekend news dump to bury those facts? That also seems likely. At this point, I’m going to assume any good jobs news from Walker’s DWD will be BS until we get backing data from a non-WisGOP source.

Either that, or DWD Secretary Ray Allen and the rest of the DWD higher-ups need to show their work and explain why it keeps getting the numbers wrong in a way that’s helpful to their boss in the Governor’s Office. And I hope I'm not the only one asking to see the spreadsheets and survey results at this point.


  1. We have a very high incarceration rate. Does that impact these employment numbers?

    1. It can on the margins. Prisoners are "out of the work force", instead of being unemployed. So high incarceration would lower both the unemployment and participation rates.

      The bigger problem is that it costs a lot more to have someone in prison vs being on unemployment and food stamps.