Sunday, February 25, 2024

New "gold standard" QCEW shows slower job growth in 2023, but faster in 2022

Last week, we got the latest release of the "gold standard" Quarterly Census of Employment and Wages (QCEW), at least for statewide job numbers and the largest counties. And I noticed that the QCEW said that job growth was only 1.5% between September 2022 and September 2023 vs the recently-revised monthly reports saying job growth was 2.0% in that time period. Does that mean we've been overestimating job growth and the Biden Boom isn't as much of a thing?

But my worries ended quickly when I took a longer-range view over the last 3 years, because it appears that this disparity reflects that the monthly jobs reports were underestimating job growth over the previous 2 years, and “caught up” with benchmark revisions that were made earlier this month.

Still, let’s see where the QCEW goes for the 4th quarter, as the monthly jobs reports indicated there was a slowdown in growth in October and November, but that a total of 686,000 jobs were added in December and January.

As for our state, we didn’t even grow as fast as the nation, ending up at 0.95% for job growth with 27,736 additional jobs between Sept 2022 and Sept 2023. That puts us down in 42nd for the US, and 6th out of 7 Midwest states.

QCEW job growth, Midwest Sept 2022-Sept 2023
Mich +1.85%
Minn +1.36%
Ohio +1.35%
Ind. +1.01%
Iowa +0.99%
Wis. +0.95%
Ill. +0.82%

Not where we want to be in the big picture of things, but not surprising given our lower-than-normal population growth and the fact that our unemployment rate had dropped to 3.1% by Sept 2022, indicating a full-employment situation.

I’ll also add that comparing the QCEW and monthly jobs reports in Wisconsin tells a similar story to what we saw in the nation as a whole – QCEW said we added more jobs in 2021 and 2022, then the monthly jobs reports caught up to those figures in 2023.

This means that I wouldn’t expect much for revisions when the annual benchmark revisions for Wisconsin’s jobs situation come out in a couple of weeks. And while the total job growth is lagging, I’m not going to complain about an unemployment rate in the low 3’s with an increasing labor force.

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