May 20, 201301:20 PMVan Lines
with Joe Vanden Plas
About those state jobs numbers …
(page 1 of 2)
Anyone who is familiar with the phrase “lies, damned lies, and statistics” will understand the editorial decision that I’m about to explain. The poster child for this saying could well be the preliminary – and we do mean preliminary – monthly jobs data for Wisconsin that are released by the Department of Workforce Development, based on statistical information provided by the U.S. Bureau of Labor Statistics.
Last week, the preliminary report for April showed that Wisconsin’s total employment rose by 7,800 in April of 2013 and the unemployment rate was 7.1%, unchanged from the previous month.
Don’t believe it, at least not yet.
IB has made the decision not to emphasize the preliminary monthly state reports because they have proven to be wildly inaccurate and at times subject to substantial revision. The reason they are wildly inaccurate is because they are based on a very small sampling of Wisconsin businesses, roughly 3.5%, as noted during last year’s gubernatorial recall election.
Instead, we’ve made an editorial decision to highlight the previous month’s revised report and de-emphasize preliminary data from the most recent month.
IB also chooses to emphasize the Quarterly Census of Employment and Wages, the QCEW, which is published much later than the monthly reports but is based on a sample size of roughly 95% of state employers. This report shows the state gained 32,000 jobs during the past 12-month period, and 62,000 over the past two years.
For clarity’s sake, it’s more worthwhile to report revised seasonally adjusted numbers for March, which don’t paint a very pretty picture. After preliminary numbers showed the state lost 8,500 jobs that month, the revised numbers show a loss of 7,000. Keep in mind that those are seasonally adjusted numbers. The not-seasonally-adjusted numbers for March show a small gain of 100 jobs.
Note to conspiracy theorists: There is no hidden political agenda here. We have not made this decision to make Gov. Scott Walker look good. Even the more reliable quarterly reports show that job growth is about half of the 250,000 new jobs he promised when he ran for governor. We’ll let Wisconsin residents decide whether to hold that against him or give him a pass because there has at least been moderate improvement.
For those of you keeping score, the state would have had to create 62,500 jobs per year, or an average of 5,208 per month, for Walker to fulfill his pledge over the four years of his term. Since he’s at about half that pace, he would have to double those numbers, a very unlikely scenario.
Incredible shrinking deficit
No matter what either employment measure says, there is reason to be upbeat about the state (and national) economy. Higher tax collections at both levels, for one, indicate a gradually improving economy.
In Washington, a combination of higher tax collections from economic growth and lower-than-anticipated spending due to the sequester has the federal budget deficit shrinking to $642 billion in the fiscal year that ends on Sept. 30, according to the Congressional Budget Office. Three months ago, the projected FY 2013 shortfall was $845 billion, and the actual deficit for all of FY 2012 was $1.087 billion, which means we’re at least adding debt at a slower pace.
For the remaining few of us who still believe deficits matter, this is welcome news, especially after four consecutive years of deficits in excess of $1 trillion. It’s hardly time to pop champagne corks because there still is much more work to be done, but it shows what the combination of economic growth (however moderate that happens to be) and spending restraint can do to shrink an annual shortfall.
There’s more revenue to be had from tax reform that lowers the corporate rate in exchange for eliminating tax breaks for the wealthy and well connected. Such reform will be labeled as “revenue neutral” because the dynamic impacts of the lower rate will not be factored into to the CBO’s estimates, but it could spur enough hiring and business activity to blow through the CBO’s “static” scoring.