Commentary
from Feb '08 Indicators

The count of jobs released every month by the Bureau of Labor Statistics (BLS) for the state and area economies is obtained from the Current Employment Statistics (CES) program, a national survey of about 160,000 businesses and government agencies. Around March of each year, this tally is revised to align with more accurate information derived from tax reports submitted by employers who are covered by state unemployment insurance laws. The latter information only becomes available six-to-nine months after the survey is conducted. The practical implication is that significant changes in employment numbers may go undetected until the BLS revisions are finally published. This becomes an important issue particularly at a time when the economy is experiencing a significant slowdown because there may be reasons to believe that employment counts are being overestimated. 

On March 11, the BLS released the revised employment figures for all states. The first figure shows the total nonagricultural employment (seasonally adjusted figures) before and after the revision. Interestingly enough, the revised numbers for March show that, on average during 2007, total employment in South Carolina was underestimated by around 20,000 jobs. This in turn means that the employment growth rate in 2007 was 1.2 percent instead of the initial estimate of 1 percent. Most of the undercount occurred in the manufacturing sector. The revised numbers show that, as of December 2007, there were 248,800 jobs in manufacturing, 8,700 more jobs than previously estimated. The second figure shows the old and revised values of the unemployment rate. The two series have a similar trend, the difference being that the revised numbers now show a smoother series. In particular, the revisions show that the much discussed jump of 0.7 percentage points in December 2007 (from 5.9 to 6.6) was a statistical fluke. The actual increase was 0.1 percentage point (from 6.1 to 6.2). In conclusion, the revised BLS numbers provide encouraging news for the Palmetto State economy, showing that the labor market is stronger than originally anticipated. o

                     Paulo Guimarães, 3/21/08