Wisconsin private nonfarm payroll employment only 112.6 thousands (45%) below Governor Walker’s goal of 250,000 net new jobs.
With the January 2015 release of the establishment employment series, figures were benchmarked to incorporate new data (press release). The new figures erase the surge in estimated employment registered in the last few months of 2014.
Below are nonfarm payroll employment and private nonfarm payroll employment, from the December 2014 and January 2015 releases.
Figure 1: Wisconsin nonfarm payroll employment, in thousands, seasonally adjusted, from January 2015 release (blue), and from December 2014 release (red). Source: Wisconsin DWD.
Figure 2: Wisconsin private nonfarm payroll employment, in thousands, seasonally adjusted, from January 2015 release (blue), and from December 2014 release (red). Source: Wisconsin DWD.
The downward revisions are particularly marked in the latter part of 2013, starting with 2013Q4. In addition, according to the preliminary estimates, the Wisconsin economy only created 300 private nonfarm jobs in January.
Figure 3: Revisions in Wisconsin private nonfarm payroll employment, in thousands, seasonally adjusted, from January 2015 release relative to December 2014 release. Source: Wisconsin DWD, and author’s calculations.
These large downward revisions reflect the new information associated with the Quarterly Census of Employment and Wages (QCEW), which as readers will recall was the data set the Walker Administration was for … before it was against (or at least indifferent to). As I discussed in this post, the estimated employment series was likely to be revised down through September 2014. The downward revisions for October 2014 and thereafter reflect both the QCEW data through 2014M09 and additional information that has come in.
With these new figures, and using the revised series to calculate the new trend required to hit Governor Walker’s August 2013 promise to hit 250,000 new jobs, the January 2015 shortfall is 112.6 thousand.
Figure 4: Wisconsin private nonfarm payroll employment, in thousands, seasonally adjusted, from January 2015 release (blue), and from December 2014 release (red), and trend required to achieve Governor Walker’s August 2013 promise to add 250,000 net new jobs, from 2014 series (gray), and from 2015 series (black). Source: Wisconsin DWD, and author’s calculations.
Note that when the BLS series (which typically match the DWD series) are released on March 17, then the Philadelphia Fed coincident indices will be revised to incorporate these downwardly revised employment series. Ceteris paribus, this outcome implies that the Philadelphia Fed coincident index will be revised downward, since the establishment employment series (NFP) and the hours worked in manufacturing are two of the four components of the index. This might prove a cautionary note for those who normalize to a time period very close to when the benchmark revision occurs (e.g., here, which uses a normalization date of 2013M07), if the comparisons of employment series are any indication.
This is what is so frustrating about Walker’s electoral success: he hasn’t really done much good. Sure, things are better, but they are better everywhere. If you judge Wisconsin by other states, it’s not really better. In fact, as Menzie has demonstrated, it’s behind. And yet, the people of the state voted for him multiple times. I just don’t get it (at least not entirely).
Oh my! I am so surprised that the Obama administration would find a way to lower the statistics for the state of the leading Republicans presidential candidate. The Obama administration would never abuse the office for political gain. After all we all know this is the most transparent administration in history, only slightly ahead of the transparent Clinton administration. Menzie, thank you for bringing this to our attention. Your are a real trooper to suffer living in Wisconsin. How anyone could live in a state they hate so much is beyond me. And all just so you can bring us such interesting economic information.
you learn a lot about someone by the conspiracy theory company they keep.
i’ve now learned enough about ricardo to never waste another second reading something he types.
cut him some slack, its hard to think straight when you are looking for the men in black suits while wearing a tin foil hat! and those black helicopters buzzing his ears are very distracting. but no worries, he has elvis on the other line…
If you believe that there is a huge conspiracy theory going on and it’s been happening for years, why not present some evidence? It shouldn’t be that hard to do, given the number of people involved with producing these statistics. No doubt they are not all partisan Democrats.
Of course, the endless investigations into Benghanzi and his alleged use of the IRS as a political tool proved virtually nothing at all, despite a lot of time and money being wasted, so I wouldn’t hold my breath. But hey, feel free to believe that up is down.
Ricardo,
I guess I don’t understand your statement.
Are you saying that Scott Walker was wrong when on May 16, 2012, he said this about the Quarterly Report: “The actual job count data is the gold standard of jobs measurement. It takes many months to review data from over 150,000 employers to get the actual job count completed, which is what has been released today.
The actual job count data released today, which I have been saying along should be used to measure jobs…” http://www.wisgov.state.wi.us/newsroom/press-release/what-best-way-count-jobs#sthash.9PBL8WER.dpuf ?
Or are you saying that Scott Walker is actually part of a conspiracy to release data that makes his regime look incompetent?
Or are you saying that Scott Walker is so unintelligent that he was easily caught in some sort of plot that, incredibly, promotes fictitious job growth in some GOP states – – Texas, Florida, North Carolina; while reporting nonexistent slow job numbers in other GOP states – – Ohio, Wisconsin, Michigan?
Or are you just saying: “Wah, Wah, Wah,”?
Ricardo. Your case is so weak, you are grasping at straws! If the data goes against you, it must be cooked! I suppose you will never have the guts to admit the data is right because that would force you to examine your assumptions. Better to hide your head in the sand!
Ricardo: You might not recall, but you commented on a post wherein I noted that the BLS (under President Obama) revised upward the Wisconsin employment series, based upon the QCEW data. Does this mean that the Obama Administration in 2013 was engaged in a massive conspiracy to lull unsuspecting people into thinking the employment data series were being honestly compiled, before striking in 2015 to deliberately decrease Wisconsin employment. You’ve made similar assertions before, but the sheer amount of devious cunning you attribute to the Administration is, even given your previous paranoid statements, breathtaking. Bravo! You’ve outdone yourself.
I think it’s time for another installment of the series “Lunatic Fringe Alert: Government Statistics Edition”, aka the Ricardo/RicardoZ/Dick/DickF/Richard Fox series…
I think it’s time for another installment of the series “Lunatic Fringe Alert: Government Statistics Edition”, aka the Ricardo/RicardoZ/Dick/DickF/Richard Fox series…
Menzie,
I totally agree. That was one of your more successful posts, if not the top attention getter one of the top. I was so flattered. I don’ think I have been that honored since I won the Rotary Club “Most Likely to Succeed” in high school.
To your other point – much less interesting of course – the Bush administration did engage in manipulation of government data for political reasons, but it is common knowledge that the current administration makes others look like slackers.
and you got this common knowledge form the men in black suits?
Ricardo: I made no remark on the Bush Administration in my comment. Hence, your response is a complete non sequitur.
Sorry, I made a huge error. I read “Bush” when you wrote “Obama.” My mistake, you are correct. President Obama does manipulate data (climate change anyone?)
Wisconsin is #5 in the nation in tax burdens. How does this play in the attempts to create new jobs? Texas is #47 and seems to have plenty of jobs.
Source please?
norm, it certainly helps to have a natural resource in your state and a political party desiring to keep that resource over emerging renewable sources. just saying, is it the tax burden, or the availability of a natural resource that helps the state? you think north dakota today is prosperous because of its tax burden?
Norm, yes, Wisconsin has a huge government burden pulling down the creation of productive jobs which means it hinders job creation. Walker has been about half successful with what he wanted to do. He has been fighting a war against the national Democrat party ever since he was first elected. I don’t know of any politician who has faced the level of attacks and vitriol he has received. But thanks to those forces he went from obscurity to the number one Republican in the nation. Every attack he counters simply makes him stronger. Contrast that to the “press conference” we just witnessed.
Ricardo, we all have our crosses to bear, don’t we?
Menzie
It has been awhile since I pointed out the downward direction of the leading index for Minnesota, and unfortunately for that state, the down trend has continued, How much concern do you place on the state leading index for the future of Minnesota? (For others, below is included a quote about the Philly Fed on how it uses the leading indicators as a prediction of the coincident index.) Minnesota has broken down severely out of recent normal range and (until the next revision) is 0.0. Other states you often comment on California, Wisconsin, Illinois, and Kansas remain within their recent range.
See Leading Index for Minnesota
From Federal Reserve’s Leading Indicator Index
The goal of the Philly Fed’s leading index is to predict the six month growth rate of it’s coincident index. The most recent data effects more than just the current monthly forecast, hence the leading index for previous months is constantly changing. The coincident indices are released monthly for each state and the US, with each set to a value of 100 for July 1992. Note that many of the components in Philly Fed index do overlap with other listed indicators, but for the benefit of our users we provide as much data as possible.
If I am reading this correctly more indicative than of small employment revisions, the more powerful leading index is not predicting good things for Minnesota, while predicting more the same for the other mentioned states.
Ed
Hi, Ed.
It may be worth while to look at the MN leading index along side those of ND, SD, MT, and CO…and then overlay the price of oil. I think the answer to your question lies in the Bakken. Cheers!
PP
Thanks for the heads up. Here is what I found.
Of the states you mentioned, Co, Mt, SD, ND; CO and ND are within their recent range of leading indicators. MT indicator has always shown high volatility, so I did not get much new information. That leaves SD which like MN, has shown recent decline in the index.
I would describe the difference of declines as follows. Minnesota decline has been consistent and persistent for 7 months, while South Dakota’s decline is just 1 or 2 months. I find the most interesting difference between the two states is, South Dakota being a very low tax state and Minnesota as a highly taxed state. This may set a test case of how fast a recovery can be made, within the index and economies in general.
If you PP, would like to put a particular flavor on oil, please do, it is not on my table.
Ed
LOL! So many intellectuals, so little sense of humor!
And here I thought I was agreeing with Menzie. Perhaps I was and others are not. Hmmmm!
Interesting stuff, Menize. However, it isn’t very surprising that an administration would overestimate their importance.
Have you done any similar blog posts comparing e.g.: ARRA forecasts vs. actuals? I know that you’ve commented on job growth during administrations, but after a quick search I can’t locate where you take the same approach that you do with Walker’s estimates.
rtd: If you a search on “conditional forecasting” you should find your answer. Governor Walker made an unconditional promise to create 250,000 net new jobs. I remember the day he said it, I remember when my colleague said that was an unwise commitment given previous trends. The President’s commitment to jobs created or saved was conditional (remember the baseline). If you recall, GDP growth and employment growth in 2008Q4 was substantially more negative than estimated at the time, and the original Romer-Bernstein projection indicated differences relative to a baseline. No such nuance was incorporated in the Walker promise.
Did Walker actually say 250,000 net new jobs was “an unconditional promise?” What an idiot.
Did Obama actually say his team’s unemployment rates were “conditional?” What a cop-out.
One issue with Obama/Romer/Bernstein was how far off the mark their forecasts were as URate peaked to a percentage point above their ‘No-ARRA’ forecast. Moreover, recall that URate isn’t revised.
rtd: Here are a few of my posts germane to the topic of conditioning: Pre-ARRA, How Badly Did Macroeconomic Forecasters Overpredict GDP and Employment in 2009Q1? and The American Recovery and Reinvestment Act at 5, and The Multiplier in Action.
That’s out of bounds here, O’Leary.
Steven Kopits: Agreed. O’Leary comment has been deleted for racist content – MDC. Thanks for your comment.
Menzie,
I did not see O’Leary’s comment but from the response of Rick Stryker and Steven Kopits I know I would agree. I have fun at your expense sometimes but if I ever step over the line I hope Rick and Steven will call me on it. As you know I have sent you an email in the past apologizing for some things I have said in the past.
I don’t know for sure but it is possible that this “O’Leary” character was the troll that was following me. If so you might have “called him” by so often posting my name rather than using my pseudonym. I hope not because if he is the same he will not be easily discouraged.
O’Leary,
What’s wrong with you that you think it’s OK to write a comment like that? Maybe you think it’s funny but it’s not at all funny.
If you disagree with Menzie, then debate him on the merits. But don’t hurl despicable, racist slurs at him. No one on the right or the left wants to see comments like yours here.
You should apologize to Menzie.
Rick Stryker: Thanks — I have deleted the O’Leary comment for racist content.
Knocked on any doors lately, Menzie?
http://www.washingtonpost.com/politics/in-wisconsin-walkers-anti-union-law-has-crippled-labor-movement/2015/02/22/1eb3ef82-b6f1-11e4-aa05-1ce812b3fdd2_story.html
‘Unions representing teachers, professors, trash collectors and other government employees are struggling to stem plummeting membership rolls and retain relevance in the state where they got their start.
‘Here in King, Magnant and her fellow AFSCME members, workers at a local veterans home, have been knocking on doors on weekends to persuade former members to rejoin. Community college professors in Moraine Park, home to a technical college, are reducing dues from $59 to $36 each month. And those in Milwaukee are planing a campaign using videos and posters to highlight union principles. The theme: “Remember.” ‘
Problem; they probably do remember…being gouged by their unions.
Patrick, are working conditions, employment stability and wages better or worse in the presence of unions? It is very clear why pro-management would not want a union presence. But in reality, why would any worker honestly desire an environment completely dictated by management?
Well, baffling, had you bothered to read the WaPo article, you’d have had your answer;
‘ “I don’t see the point of being in a union anymore,” said Dan Anliker, a 34-year-old technology teacher and father of two in Reedsburg, a tiny city about 60 miles northwest of Madison.
‘ …. “Everyone’s on their own island now,” he said. “If you do a good job, everything will take care of itself. The money I’d spend on dues is way more valuable to buy groceries for my family.” ‘
Patrick R. Sullivan: Sounds like sound advice. I think I don’t need a nation-state to protect me any more. No need for nukes; we just have to rely on own rifle to protect ourselves against all enemies.
I am still waiting to hear you admit you were in error regarding depth of the downturn in Canada vs. US during the Great Depression. As you recall, you stated unequivocally:
And this statement is wrong.
Patrick R. Sullivan: I am still waiting to hear you admit you were in error regarding depth of the downturn in Canada vs. US during the Great Depression. As you recall, you stated unequivocally:
And this statement is wrong.
The other interesting note about the recent benchmarks for both the US and Wisconsin is that it indicates Walker’s goal of 250,000 private sector jobs wasn’t impossible- if Wisconsin had held up with the US rate, it would have gained 222,000 jobs.
However, we weren’t that lucky to get that level of growth in Wisconsin, as Menzie mentions in his post, which means there’s a Walker “jobs gap” of 84,000 jobs in his first term. Somehow I’m guessing he isn’t bringing up that reality on the campaign trail this weekend in New Hampshire (and I also doubt that he brings up the fact that he lied about Nancy Reagan giving him Ronnie’s Bible).