Sunday, March 26, 2017

February jobs look good, but we also thought so last year, and it didn't turn out

Now that we've adjusted 2016 jobs data in Wisconsin to new annual benchmarks, we are seeing the state's jobs reports come in fast and furious. The latest one came out on Thursday reflecting the figures from February 2017, and it indicated a strong month when it came to job growth.
Place of work data: Based on preliminary data, the state added 28,200 total non-farm jobs and 21,500 private-sector jobs from February 2016 to February 2017, with a statistically significant gain of 11,100 total non-farm jobs as well as 7,600 private-sector jobs over the month. January 2017 total non-farm jobs were revised up 5.200 and private-sector jobs were revised up 4,600....

DWD Secretary Ray Allen issued the following statement: "Revised numbers show Wisconsin gained 10,400 private-sector jobs in January and preliminary numbers show we added 7,600 private-sector jobs in February, pointing to an excellent start to 2017. Building on this economic progress, Governor Walker's recent budget proposal reinforces Wisconsin's economic and workforce development strategy, which has supported the state's economic growth."
Sounds great, but looking inside the numbers, it seems like two low-wage service areas were the biggest beneficiaries of those two months of growth- one involving retail trade and other stores, and another that's mostly lodging and food services.

Change in jobs, Dec 2016-Feb 2017
Trade +7,800
Leisure and Hospitality +3,900
Rest of private sector +6,300

I also found it odd that the construction industry lost 800 jobs in February on a seasonally adjusted basis in Wisconsin, in the same month that we were seeing record-warmth in the state, meaning you'd expect a "gain" that would result from lower-than-normal seasonal layoffs. Manufacturing did have 600 jobs "gained" for this reason in February, but let's see what the next two months look like in both of those industries. I want to see if hiring was spurred in late February and early March due to all the warmth (which would show in a higher March number), or if the cooler, wetter weather of this month means that seasonally-adjusted hiring goes down for March and April.

And in general, these "good news" jobs reports should be taken with a serious grain of salt. Why do I say that? Take a look at what Walker's DWD was saying last April.
The state added a statistically significant 13,100 private sector jobs from February 2016 to March 2016 on a preliminary basis, including a significant gain of 4,200 jobs in manufacturing. Wisconsin also added a significant 47,500 private-sector and 51,200 total non-farm jobs over the year ending in March 2016, the best year-over-year growth since August 2004 in both categories. Additionally, revised February private-sector job counts swung from a gain of 8,000 to a gain of 10,500 private sector jobs, a difference of 2,500....

"Today's report shows that Wisconsin's employment was higher than ever in March, our unemployment rate dropped over the month while the national rate increased, and the state experienced the best 12 months of job growth since 2004," Secretary Allen said. "All indicators show that under Governor Walker's leadership, Wisconsin's economy is expanding and adding jobs in 2016."
And then the "gold standard" Quarterly Census of Employment and Wages came out several months later for the January-March 2016 time period, showed that year-over-year job growth for March 2015-March 2016 was 10,000 jobs less than than what DWD said it was, and certainly NOT the best since 2004 (it wasn't even as good as March 2014-March 2015). This led to the figures to be largely revised down when the numbers were benchmarked earlier this month.

Jan 2016- Feb 2016 private sector jobs
Jan 2016
Originally reported +5,800
Later revised +9,400

Feb 2016
Originally reported +10,500
Later revised +4,300

March 2016
Originally reported +13,100
Later revised +600

Originally reported +29,400
Later revised +14,300

So yeah, DWD, let's not get too far ahead of ourselves, shall we? Well, if you have any semblance of your office's mission beyond being a Walker campaign piece, that is.

Even more remarkable is that these surprisingly high job totals for January and February still have Wisconsin trailing most of our neighbors when you look at the last 12 months (the tables are located in this report), as well as the nation as a whole.

Private sector job growth, Feb 2016-Feb 2017
Mich +1.86%
U.S. 1.50%
Minn +1.36%
Ind. +1.25%
Ohio +1.06%
Wis. +0.87%
Iowa +0.77%
Ill. +0.71%

Combine these lagging figures with the claims of a 3.7% unemployment rate (that's caused by Wisconsin's low population growth more than adding jobs), and a consistent WisGOP olicy of wage suppression, and you tell me where the spark comes that will allow things look much better in the state over the next 10 months? And along with that, how will we get the revenue growth necessary to pay for our services? I'm not seeing it.

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