Saturday, May 17, 2014

Don't celebrate those "strong jobs reports" yet in Walkerland

I was going to let the analysis of the April jobs report go with my last post, but then the Walker Administration had to open up their mouths in light of Friday's state-by-state jobs release from the BLS. At first glance, the Walker folks have a right to crow, as for once the numbers shape up pretty well compared to the rest of the other states.
Highlights of today's Bureau of Labor Statistics (BLS) report of state-by-state employment and unemployment estimates include:

- Wisconsin's unemployment rate had a statistically significant decrease between April 2013 and April 2014. (2014 5.8% v. 2013 6.8%). Wisconsin's unemployment rate has fallen for nine consecutive months.

- Wisconsin's year-over-year increase in manufacturing jobs was 10,400 jobs, ranking 4th highest across the country.
Wisconsin has a statistically significant private-sector job (Current Employment Statistics) increase between April 2013 and April 2014 was 44,000, which ranked 16th nationally.

- Wisconsin had a statistically significant total nonfarm job (CES) increase between April 2013 and April 2014 at 54,100, which ranked 10th nationally and the best of total nonfarm job growth rate of any neighboring state.
And I suppose having these stats beat having jobs go away, but that release leaves out a lot of important context that will put this record in proper perspective- one that makes this look a lot more mediocre than the DWD's press release spin job. First of all, having a "statistically significant" increase in jobs or decrease in unemployment over the last 12 months isn't all that special as the Obama Recovery continues. As the BLS report shows. 29 of the 50 states had statistically significant increases in jobs, and 33 of the 50 states in the nation had statistically significant drops in unemployment. And some of the 17 states that didn't have significant unemployment drops were already near full employment by April 2013, so they didn't have far to go. These states include Iowa (at 4.3% unemployment for April 2014), Minnesota (4.7%), North Dakota (2.6%), South Dakota (3.8%), Utah (3.8%) and Oklahoma (4.6%).

Also, we know from the recent QCEW submission that the CES monthly job reports that DWD is quoting in this release is off. When compared to the Walker-described "gold standard" QCEW report, the monthly reports overestimated job growth by nearly 11,700 jobs in 2014.

Private sector job growth, Wisconsin 2013
CES monthly- +39,700 (+1.66%)
QCEW quarterly- +28,006 (+1.20%)

Interestingly, this difference in year-over-year job growth was just a little more than 1,300 in April 2014, which means that more than 10,000 jobs were overestimated for the last 8 months of the year. So if you use the QCEW numbers for job growth through the end of 2013, and then combine them along with the 4 months of 2014 reports, and you get around 34,500 private sector jobs, not 44,800. Still not bad (it's about the same as the 2010 and 2012 years for job growth, instead of 2013 "worst in the Age of Fitzwalkerstan" number), but not as impressive as Walker's DWD wants to make it sound.

3. Lastly, even with this overestimated "great growth" in the last 12 months, Wisconsin still lost ground compared to the rest of the nation, with the Walker jobs gap growing another 6,800 private sector jobs in that time period.

In fact, the only reason that the overall Walker jobs gap hasn't grown that much is that Wisconsin has added 10,000 government jobs in the last year while the U.S. as a whole has shed 6,000 government jobs. Interesting how DWD Secretary Reggie Newson doesn't say that in his press release, isn't it?

But maybe Scott Walker's folks are realizing that investing in government and hiring people pays off in other sectors of the economy, eh? Their record levels of spending, increased borrowing, and record debt in the most recent budget also indicate that (as recently noted by State Sen. Kathleen Vinehout). The Walker folks and the WisGOPs just redirected where taxpayer money went - taking from public schools, public workers and local governments, and sending it to voucher schools and the road builders, as well as paying more state costs for rail and Medicaid instead of taking federal money. They don't want people to make that connection, but it's definitely there.

And even more hilariously, the Walker Admin's crowing about April's jobs numbers look to be a short-term blip, explainable by April 2014 growing by 8,000 jobs vs. April 2013 retreating by 7,300 jobs. That seasonally-adjusted lower base in 2013 (which makes the last 12 months look good for now) snapped back in May and June, with 10,600 jobs being added back (9,300 in the private sector), so in order to maintain these higher job growth numbers, we need to grow by at least that much for May and June of 2014. Right now that would seem a tall order for May, as last week's Wisconsin's new unemployment claims number came in similar to the levels they had this time last year, (that number staying high despite numerous complaints about DWD not processing unemployment claims in a timely manner, resulting in a legislative audit). In addition, the mass closings at American TV and JC Penney have happened since the April jobs report survey week, in a time period when retail ususally hires up. These jobs hadn't been eliminated in April, so the 4,100 increase that month in Wisconsin's "Trade" sector (of which retail makes up a lot of) seems unlikely to stay around for May.

But it's obvious that the Walker Administration needs to hang onto some kind of positive job news, as the state's media (surprisingly to me) ran with the news that the QCEW numbers indicated Wisconsin's 2013 private sector job growth was the worst since Walker took office, and now they're desperately trying to change the storyline. But when you look inside the numbers, even that positive news isn't all that much to speak about, and it doesn't deflect from the overall FAILURE that has defined Walker's and WisGOP's jobs record.

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