Place of residence data: A preliminary seasonally adjusted unemployment rate of 3.1 percent in May 2017, down 0.1 percent from April and at its lowest rate since October 1999. The rate remains lower than the national unemployment rate, which was 4.3 percent in May 2017.And Walker’s DWD notes that their figures show that more Wisconsinites are “employed” than ever before (not a big deal, since the state’s population is also higher than ever before). All of these employment/unemployment stats were tweeted out by Governor Walker and numerous other WisGOP elected officials.
•The rate of 3.1 percent is the second-lowest rate on record for Wisconsin (the lowest rate was 3.0 percent in May-July 1999).
• Wisconsin's January (3.9 percent) to May (3.1 percent) unemployment rate decline of 0.8 percentage points in 2017 is the steepest January-May decline since 1983.
What wasn’t tweeted out by WisGOPs was this other part of the report.
Nonfarm payrolls, Wisconsin May 2017
May 2017 -3,100
April 2017 revision -1,700
TOTAL CHANGE -4,800
Private sector jobs
May 2017 -1,700
April 2017 revision -1,500
TOTAL CHANGE -3,200
And among the biggest sectors of seasonally-adjusted lost jobs were in manufacturing (-1,200 with revisions) and construction (-1,600 with revisions). If we focused on that part, May would be a bad jobs report.
So why is there such a difference? Let me remind you that the numbers in the monthly employment reports come from two different surveys.
Current Employment Statistics (CES): compiled from a monthly survey sent to about 5,500 employers (3.5 percent of Wisconsin employers). CES data has been shown to be volatile and subject to revision.These numbers may be different from each other from month to month (partly due to differences in sample size and also due to variation of who is surveyed), but should generally be in the same direction over a decent span of time.
•Local Area Unemployment Statistics (LAUS): compiled from a monthly survey of 985 households and unemployment insurance claims. Measures the labor force, employment, unemployment, and the unemployment rate.
But if you look at the payroll vs household numbers from those two surveys for more than 5 seconds, and compare them to the start of the year, your BS detectors should be on full DefCon 1. Tell me how these two numbers could possibly come from the same state.
Total Non-farm Payroll Employment, Wisconsin Dec 2016- May 2017
Dec 2016 2,934,300
May 2017 2,957,100
Household employment/unemployment Dec 2016- May 2017
Dec 2016 2,988,100
May 2017 3,059,000
So household employment is three times more than payroll employment? I don’t think so. I have a hard time buying that there are tens of thousands of Wisconsinites that still live in the state, but just started working in another state in the last 5 months (which would be an explanation for this disparity of nearly 50,000 workers). There are either some serious adjustments that need to be made to the state’s household survey, or there’s a major hiring boom going on and it’ll be registered in the next 2 QCEW reports that’ll come out over the next 6 months (riiiight).
If we were truly seeing job gains of 14,000 people a month (which is what the household figures say) then we’d be seeing it reflected in strong revenue numbers. We haven’t, and in fact, income tax revenues have fallen on a year-over-year basis in 3 of the 4 months measured in 2017 (including April, which is the last month that has been released to the public).
In addition, are we to believe that Wisconsin went from 15,420 jobs gained in all of 2016 (according to the “gold standard” QCEW) to 70,000 IN FIVE MONTHS? Come on. And this would not the only time Walker’s DWD has overestimated household employment and labor force. Go back to what they were saying at the end of 2016, and the DWD ended up being way off.
Household, labor force 2016. Wis DWD estimate vs revision
Household employment, Dec 2015- Dec 2016
DWD estimate +42,400
Labor force, Dec 2015- Dec 2016
DWD estimate +24,300
Notice that those revisions happened after the Bureau of Labor Statistics looked at the QCEW and saw that all attributes of the state’s jobs numbers were being overstated. And it seems likely that 2016’s pattern of “high DWD reports revised down by the QCEW” will repeat for the start of 2017, which will come out over the next few months.
But why is this happening again? While I’m not accusing Walker’s DWD of intentional malfeasance, their constant spin and happy-talk about the state’s job market along with Walker’s and WisGOP’s having to convince the Wisconsin public that their policies haven’t failed leads me to be very skeptical of these employed/unemployed numbers. And these guys would not be below juicing up jobs numbers in order to get headlines and false memes to the public ahead of an election.