Earlier this week, the BLS released new estimates of state employment, based upon Quarterly Census of Employment and Wages (QCEW) data through September 2012. The figures for Wisconsin have been substantially revised upward. As indicated in previous posts   , census data had indicated substantially higher nonfarm payroll employment than that derived from surveys.
The Upward Revision in Context
Figure 1 depicts the data, pre-benchmark, the most recent release, what I had previously estimated as employment, based upon an estimated relationship that held before the implementation of new estimation methods by the BLS (see this post), and finally, the level of nonfarm payroll employment implied by Governor Walker’s promise to create 250,000 jobs by the end beginning of 2015.
Figure 1: Nonfarm payroll employment in Wisconsin, December 2012 release (blue), January 2013 release (red), estimated relationship using Quarterly Census of Employment and Wages (QCEW) (see this post) (green), and path of nonfarm payroll employment promised by Governor Walker (promised private employment plus actual government employment) (purple). Source: BLS and author’s calculations.
It is interesting that the estimates I generated based upon a historical relationship between nonfarm payroll employment series and the QCEW roughly fits the revised BLS series. That being said, employment remains 2.1% (log terms) below the path promised by Governor Walker. In fact, two years into the Walker Administration, employment is only 1.6% above where it began.
Revisions across the Country
Wisconsin is not alone in terms of the revisions. As the BLS observes:
For March 2012, 46 states revised nonfarm payroll employment upward, while 4 states and the District of Columbia revised payroll employment downward. (See Table 2. or Graph 1.) For March 2012, 17 states had revisions greater than –0.5 percent and less than 0.5 percent; 14 states had absolute percentage revisions of 1.0 percent or greater. (See Table 2. or Graph 1.)
For December 2012, 15 states had revisions greater than –0.5 percent and less than 0.5 percent; 18 states had absolute percentage revisions of 1.0 percent or greater. (See Table 2. or Graph 2.)
Graph 2 from the BLS report summarizes the extent of the revisions across states:
Wisconsin in Context
Since the neighboring states’ employment series were also revised upwards, it is no surprise that Wisconsin continues to lag those neighbors in terms of progress since 2011M01.
Figure 2: Log nonfarm payroll employment for Wisconsin (blue), Minnesota (red), IL (green), Michigan (purple), and United States (black bold), normalized to 2011M01=0. Source: BLS, March 18 release, and author’s calculations.
Wisconsin’s cumulative employment growth deficit since 2011M01 relative to the United States overall is 1.7% (log terms), and relative to Minnesota is 2.1% (interesting considering the Governor’s remarks regarding Minnesota’s economic policies ). The growth deficit relative to hard-hit Illinois is 0.7%. Moreover, in January, Wisconsin employment declined, by 2.6% on an annualized basis (in absolute value, slightly more than the standard deviation of growth rates over this sample).