- State level employment estimates are very important for forecasters, policymakers and the media
- Current monthly employment estimates are over one full year off benchmark
- Using QCEW data through Mar ’12 as guide, the state level estimates for all states will be revised upward nearly 700,000 (0.6%)
- National data will be revised up 0.3%, in-line with historical revisions
This morning the BLS released two important pieces of information. First, the preliminary national benchmark revealed that the March 2012 national employment figures will be revised upward by 386,000 or 0.3% (private sector up 453,000 and public sector down 67,000.) This is inline with the historical average in terms of revision size. The second piece of data was the QCEW release for 2012q1. What follows below is a quick update on the state by state employment revisions discussed more thoroughly in a previous post. The QCEW is a near complete count of employment and due to the much larger coverage size (relative to the CES), the data release lags a few extra months. With this latest release we now have a good understanding of when and where the state level data revisions will be for early 2012.
This first graph shows year-over-year employment growth for both the national data and the sum of individual states (plus D.C.) The graph shows two important trends. First that the QCEW sum of states is outpacing the national data (more on that below) and second, that the QCEW is substantially outpacing the CES sum of states. The fact that the QCEW is so much stronger is an indication that the monthly employment releases – particularly at the individual state level – have actually been under counting employment by nearly a full percentage point. This also means that the vast majority of the states will see positive revisions to their employment series when the next set of benchmarks are released in March 2013 – at least for late 2011 and early 2012. Revisions to the most recent few months are unknown at this time, or at least until the next quarter of QCEW data is released.
For March 2012, the QCEW sum of states data indicates that nearly 2.6 million private sector jobs were created over the year. The national figures show just over 2.2 million, while the CES sum of states show only 1.9 million. With the announced national benchmark for the private sector of 453,000 this will bring the national figures more in-line with the gains seen in the QCEW data, although slightly stronger. While the CES state employment figures showed stronger growth in early 2012 than in 2011 (see the jump in the red line above), this still represents an under count of employment as seen in the QCEW data. Using the QCEW sum of states growth as a guide, this indicates that the published, monthly state employment reports are under counting employment across the nation by nearly 700,000, or 0.63%.
The national private sector revisions are 0.41% so the sum of states’ revision of 0.63% is not necessarily too much higher, although it is about 50% larger. However, for any given state the size of the expected revision is considerably different than the average. The graphs below shows estimated individual benchmark revisions for March 2012. The graph on the left is the revision as a percentage of the currently published CES figures, while the graph on the right is the size of the revision in thousands of jobs.
For a more thorough discussion on employment benchmarking, please see the previous post. The 2012q2 QCEW data is scheduled to be released Jan 8, 2013.