Wednesday, August 24, 2016

July jobs decent, but "gold standard" says things may not be so good

Now that I've had a bit of time, I wanted to follow-up on last week's Wisconsin jobs report, and put the figures into wider context.

1. The monthly job numbers are not bad at all for July (9,100 jobs added overall, and 5,000 in the private sector), but large downward revisions have happened in each of the previous two months (a combined downward revision of 10,600 total jobs and 11,600 private sector jobs). It means that job growth has been very small since March (2,500 private, 8,900 overall), despite all of the happy talk at the start of the year.

And given that U.S. job growth has sprung back in the last 2 months, this means the Walker jobs gap is growing again, now just under 91,000 private sector jobs, and 90,000 jobs overall.

2. And even those increases in the first three months of the year may not hold up. To be sure, the preliminary numbers of the "gold standard" Quarterly Census on Employment and Wages that were part of that July report showed improvement. Year-over-year private sector job growth in March up to 1.59% compared to September's 2-year low of 1.23%, and it was even more impressive in February, which had year-over-year growth at 42,648 - the highest in the Age of Fitzwalkerstan.

But March's 1.59% private sector job growth rate was also well below the 1.98% that the figures said in Spring, and as Chris Walker pointed out at Political Heat, the 12-month private sector job growth between March 2015 and March 2016 ended up being 10,000 jobs below what the "seasonally adjusted" monthly numbers indicated. That seems to indicate the monthly figures from the start of this year will be revised down when the next benchmarking happens next winter, and it also makes Wisconsin likely to remain in the bottom third for U.S. job growth when the nationwide QCEW is released in 2 weeks.

Bottom line- things aren't collapsing in Wisconsin, but we do continue to lag the rest of the country, and the last few months have seen another flatlining of job growth that makes me wonder how much more can be added (especially with regressive WisGOP policies driving talent into retirement and out of the state). Even worse, I fear that even with this past year's job growth, tax revenue growth will not follow (we'll find out in the coming days on that). If revenues do fall short, that means even more budget deficits to deal with in the near future, and that's before the effects of recent natural disasters and the mass closings of the Oscar Mayer and Manitowoc Crane plants ripple their way through the Wisconsin economy.

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