Thursday, August 20, 2015

Another WIs jobs report has "Good, Bad and Ugly"

It's been a bit buried with the release of the Marquette Law Poll showing our Fair Guv with a 39% approval rating, but there was another monthly Wisconsin jobs report released this afternoon from the Department of Workforce Development. It showcased a mixed bag, with good topline numbers, and not so good figures behind the numbers.

The good- Solid gains in July, as there was a seasonally-adjusted gain of 12,400 total jobs, and 8,200 private sector jobs. There was growth among most sectors of the state's economy, and manufacturing gained 1,700 jobs, after not adding any jobs in that area since January. The increase in government jobs by 4,200 is a bit misleading, because much of that is due to lower-than-normal July layoffs, but all in all, these figures are pretty good, and a major change from the downward trend we had been on in prior months.

The bad- Those July gains were from a much lower level, as June’s jobs figures were revised down by 4,800 overall, and 4,300 in the private sector, with over half the revised losses were in the tourist-driven Leisure and Hospitality sector (the same sector dropped 700 additional jobs in July). These revisions mean Wisconsin LOST 12,800 private-sector jobs on a seasonally-adjusted basis in the four months between February and June. It also means the private sector Walker jobs gap has grown from what we knew it to be yesterday, and is now past 97,000.

The bad June numbers also likely drop Wisconsin to dead last in the Midwest for job growth the first half of this year, as we only gained 5,200 jobs in the first 6 months of 2015. This is after coming in dead last over the first 4 years of the Age of Fitzwalkerstan.

The ugly- The trend of Wisconsinites dropping out the work force continues. 7,500 more people left the Wisconsin work force in July, and June’s already-huge decline went from 11,200 to 11,400. The total drop in the work force is over 48,000 from the peak that was reported, in January 2015, and it’s the lowest it’s been since April 2012. The number of Wisconsinites listed as “employed” has dropped by nearly 39,000 since February, and is only 2,000 more than it was 12 months ago, which is a far cry from the addition of 40,000 jobs being put in the monthly report (a number that will likely be revised down itself, as I noted yesterday).

Sure, the work force dropouts allow Gov Walker to hide behind a talking point of “4.6% unemployment in Wisconsin,” but if we’d kept the workforce at the same levels we had back in January, and these employment numbers were the same, our unemployment rate would be 6.1%, and not 4.6%.

As I’ve said before, the only reason Wisconsin’s unemployment rate isn’t jumping in 2015 is because people are RETIRING AND/OR LEAVING IN DROVES. At some point, this reality has to reflect in continued slower growth, or the labor force snaps back and drives the unemployment rate higher. Neither will help the argument that Scott Walker is trying to sell to the out-of-state rubes on the campaign trail.

So one good month of July job growth doesn’t come close to making up for a horrendous first half of 2015 in Wisconsin. It will be interesting to see how this measures up when the state-by-state figures are released tomorrow by the Bureau of Labor Statistics, as you’d have to think we measure up terribly, since the country was adding well over 200,000 jobs a month in that same time period. And with teaching shortages abounding, Summer job season ending, and the stock market tumbling, I don’t see where a spark comes that can shake this state out of its fiscal and economic doldrums, certain not with this regressive rew of lawmakers in charge.


  1. What do you make of the Place of Residence and Place of Work employment numbers heading sharply in opposite directions? Just from June to July, Place of Residence Employment is -7,600 but Total Private Employment is +8,200. And as you note, from Feb15 to Jul15, 39,000 fewer Wisconsinites are listed as employed. Yet Total NonFarm has held steady and Total Private has only dropped by -2,900.

    Or, the Yr-over-Yr change from Jul 14 to Jul 15:
    Employment (Residence) = +1,740
    Total NonFarm (Work) = +44,500
    Total Private (Work) = +40,300

    Does all of this just indicate that the 2015 monthly numbers are due for some serious downward benchmarking? Or, has there been a huge influx of non-residents working in WI (would think Construction numbers would be stronger)? Or is there something else this might be indicating? Seems kinda weird. Thanks!

    1. Something's clearly strange here, I agree. Both numbers are awful, and both point to a potential exodus of talent. But the drop in the work force (which keeps the unemployment rate low) is setting off my BS detectors.

      I do think we are set see both revisions in at least 1 of these stats come next March, and the recent QCEW stats indicate it would be on the (Work) side

    2. On the mass exodus front, could it be that most of the Place of Residence losses are leaving the state, and the jobs they left are still counting towards Place of Work numbers? The first part would explain Labor Force and Resident-Employment following each other downhill so conveniently closely.

      Not sure how the employer-side reporting works, but if somebody's last day is July 1 (or they spend their last couple weeks technically still employed but using up vacation time), and they hire their replacement (or get a temp) by July 30, would that one position maybe count as 2 TNF/Private jobs for that month? Or could they count vacant jobs for which they're recruiting in the TNF/Private numbers?

    3. I believe that Meniz Chinn over at Econobrowser is looking for large downward revisions.

    4. Jake,

      Despite the fairly big news in these numbers--the grand total of 5,200 new jobs year-to-date, and the continued decline in the state's labor force, the news coverage was nearly nonexistent. The WSJ had a paragraph stating that the monthly numbers, "subject to revision and blah, blah, blah," showed stable unemployment--end of story. The MJS didn't cover it at all.

      So chalk up a victory for Walker, he has reduced the monthly (and for all practical matters the quarterlies as well) job data to political irrelevancies--no one cares or pays attention to the numbers and they play no role in determining the perceived economic progress of the state, well except for a handful of economists.