Why the jobs numbers could be (a bit) better than they look
Speculate all you want about the meaning of the March jobs data. But we won’t find out the real employment figures until this September. Why? The Bureau of Labor Statistics’ monthly payroll numbers are based on a survey of only about a third of workers, which is why there’s a significant sampling error each month, explains Joel Prakken, senior managing director of Macroeconomic Advisers.
More comprehensive data come from the Quarterly Census of Employment and Wages (QCEW), provided by state employment programs and covering about 98 percent of workers. The problem is, it takes six months for the data to be collected and released, and the BLS only revises the jobs data one time, at the end of the year. Macroeconomic Advisers recently analyzed the most recent QCEW data from March to September 2011, and estimates that there were about 26,000 more jobs per month than the BLS had originally calculated, indicating stronger employment growth. “As such, it hints at the possibility that payroll employment through March 2012 could be revised up early next year,” the firm writes.
Macroeconomic Advisers revised jobs figures for 2011 are also also slightly higher than the BLS’s own initial revision to its 2011 data, which it released in early January. That revision added about 260,000 jobs for the year--or 21,700 each month--on top of the BLS original figures. The bureau will go back a second time once the final quarterly QCEW report is out later this year.
Given the preliminary nature of the early QCEW reports, Prakken says it’s still too early to predict how much the 2011 data will be revised--much less 2012’s numbers. Although the BLS revisions have increased employment estimates over the past year, they’ve also overstated growth in the past, revising them downward. Even if 26,000 jobs do get added every month, per the latest QCEW report, it wouldn’t be enough to noticeably change the employment rate. That said, Prakken adds, “every little positive piece on employment, however tentative or preliminary, is good news.”