Mixed News on WI Jobs: Growth in March Barely Offsets Prior Losses in 2014

Thursday, April 17, 2014 at 7:01 PM by

Wisconsin Unemployment Rate Drops to 5.9%   

New employment data for Wisconsin was released today by state and federal officials, and the news is pretty positive, at least at first blush, but a closer examination of the new and updated figures reveals some bad news as well.

One very positive part of the new data is that the state appears to have gained 6,900 jobs in March, including 6,500 in the private sector. These figures are from the Bureau of Labor Statistics’ preliminary, seasonally-adjusted estimates for March. Compared to the BLS survey data from March 2013, Wisconsin has gained 38,400 total (nonfarm) jobs over the past 12 months, including 29,900 in the private sector.  (To put that into context, Wisconsin would need to add an average of 62,500 private sector jobs per year to hit the Governor’s pledge of 250,000 new jobs during his first term.)

Although those preliminary March numbers and an encouraging drop in the state’s unemployment rate to 5.9% are noted very prominently in the Department of Workforce Development (DWD) press release, the bad news has to be ferreted out of the tables on pages 2 and 3 of that release.  What you will see in Table 3 on page 3 is that the revised data for February show a significantly larger job loss for that month of 13,000 (compared to a preliminary estimate that Wisconsin lost 9,500 total jobs in Feb.).  The improvement shown in the initial March estimate gains back only about half of the jobs lost the previous month. 

If we combine the estimated employment changes over each of the first three months of 2014, one finds that Wisconsin appears to have added 300 total nonfarm jobs during the first quarter of the year, and 900 private sector jobs (which is a considerably less rosy picture than the DWD press release paints). 

Keep in mind that the figures released today are just the preliminary March estimates and come from the monthly BLS survey that yields imprecise estimates because it uses a very small sample size (3% of state employers).  The Walker Administration has pointed out numerous times that the far more reliable (but less timely) job numbers are from BLS quarterly reports, which are based on a survey of 96% of Wisconsin employers. A Journal Sentinel article today by John Schmid sums up the most current data from that source: 

According to the most recent Quarterly Census, released earlier this month, Wisconsin gained 28,351 private-sector jobs in the 12 months from September 2012 through September 2013 — a 1.2% pace that ranked it 35th among the 50 states.

Returning to the more positive news, the new figures indicate that Wisconsin’s unemployment rate fell to 5.9% in March, compared to 6.1% in February and 6.9% in March 2013.  That’s the lowest unemployment rate in five years, and 1.4 percentage points above the rate in December 2007, the month before the Great Recession began.   (Minnesota has now gotten back to it’s pre-recession level of 4.8%.) 

The unemployment rate comes from a survey of households, rather than the employer survey.  Considering that the rate was 6.3% three months ago (and the labor force hasn’t declined), the drop to 5.9% is a somewhat surprising development during a period when the employer survey shows no sign of appreciable job growth.  Unless a lot more Wisconsin residents are now commuting out of state for their work, which seems very unlikely, the two surveys appear to be inconsistent.  We’ll have to see if future revisions to the preliminary data help sort out the apparent inconsistency.

Jon Peacock


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