Thursday, August 15, 2013

Getting back to normal with a tepid July jobs report

I figured things might settle down in this month's Wisconsin jobs report after three straight months with changes of more than 10,000 jobs. And it turned out I was right, as the state gained 2,000 jobs on a seasonally-adjusted basis for July, and 1,800 in the private sector. Granted, you have to do a lot of searching through the DWD's convoluted release, but that's the bottom line- a largely stagnant report, with unemployment also staying level at 6.8% for the month as well.

Going inside the numbers, it look like the big gainer is in the Transportation, Warehousing and Utilities sector, which had a "gain" of 2,600 jobs that seems mostly related to lower than normal July layoffs (they lost 300 in the unadjusted survey). The big loser? The seasonally-related Leisure and Hospitality, which "lost" 2,600 jobs despite adding 2,300 in the unadjusted survey.

So let's look at the last 5 months, now that things have gotten back to normal after the cold Spring delayed seasonal hiring, and explained some of the major swings we saw.

Total job changes, Wisconsin 2013
March 2013 -7,000
April 2013 -21,900
May 2013 +9,400
June 2013 +18,700
July 2013 +2,000
March-July TOTAL +1,200

That number's not so good over 5 months, and as you can see, it's meant that the Walker jobs gap has grown again, now nearing 53,000 private sector jobs, and 48,700 overall.

Also released by the DWD were the numbers the state sent to the BLS for the Quarterly Census on Employment and Wages (QCEW), the "more complete" report that gets a lot of hype when the national report comes out every three months. These figures include a bad stretch of job numbers in Fitzwalkerstan, as the end of Q1 2013 only had an increase of 24,124 private sector jobs compared to the end of Q1 2012. 2,000 jobs a month adds up to less than 100,000 jobs in 4 years, which sure ain't 250,000.

In fact, 24,000 private sector jobs is barely over 1.0%, in a time when private sector job growth in the country was around 1.9%. As this next chart shows, the year-over-year increase in private-sector jobs in Wisconsin has continued to be on a downward trend, since peaking in March 2011- the month Act 10 was passed into law.

And the raw numbers show a drop of more than 40% in jobs compared to the Act 10 month of March 2011, with this trend also going in the wrong direction.

Now in the 4 months in between the March QCEW report and today, the state's added a little over 2,000 private sector jobs a month instead of flatlining like it did between March and June 2012, so I'd guess June's QCEW report may look a bit better. But it's still well below the national trend, and I'd anticipate Wisconsin to continue to lag the nation in the jobs department. In fact, once the seasonal jobs from May and June go away in the next 2 months, we may be back to sucking once again.


  1. In the pre-released QCEW figures we also saw that total wages were up 1.8% in 2013Q1 vs 2012Q1, so the average weekly wage was up about 0.9% or about -0.8% in real terms (midwestern inflation was 1.7% for 2013Q1). That's not promising.

    While total wages were up 1.8%, withholding was up 3.2% for the quarter. While tax receipts are quite volatile, this does tend to suggest that a larger fraction of wages are migrating to the upper end of the scale i.e. income inequality is growing.

    1. Actually, if you want to really geek out, let's also remember that there were a few more jobs in 2013 vs. 2012, so that's some of the increase.

      So when you do that, you see the average wage per private sector job was $10,780 in 2013Q1 vs. $10,623 in 2013Q2, so the increase is really only 1.42%- below the 1.7% level of inflation. So real wage per job WENT DOWN in these 12 months. Not good.

      Yes I know I just lost most of our listeners, but hey, why not be wonky on a Friday morning?

  2. Also I'm not so sure about 2013Q2 being that promising: CES values for March 2012 have been benchmarked, but those for March 2013 haven't yet.

    CES showed an annual growth for this period of 16,800 (16,000 in the private sector), yet the pre-released QCEW figures show 25,776 more jobs in total (24,124 in the private sector), suggesting that CES for March 2013 is reading about 8,000 too low (still within the statistical error bars) and therefore the March - June 2013 growth may be 8,000 too high compared to the first glance, or roughly flat.

    Withholding receipts for June 2013 was just a nose above (by 0.2%) those for June 2012 plus inflation. If jobs are up by much (it'd be surprising if they weren't: your chart doesn't get to zero growth until 2015) then we're likely to see another quarter of erosion of real wages.