Division of Research

Commentary
from Mar '09 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 around 160,000 businesses and governments agencies. Around March of each year, this tally is revised to align it 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 there is much interest in understanding the short term trend of the economy.

Last year, when the BLS revised its numbers, it concluded that total nonagricultural employment for South Carolina had been underestimated by around 20,000 jobs. Figure 1 shows the 2008 values for total nonagricultural employment (seasonally-adjusted figures) before and after the March revision. The unrevised numbers were clearly suggesting that the Palmetto economy kept adding jobs all the way to January of 2008. After August 2008, the employment deteriorated rapidly. The revised numbers show a somewhat different picture. First, throughout 2008, the BLS overestimated the total count of jobs by around 20,000 (19,800). Second, the revised numbers suggest that the South Carolina economy stopped growing in the summer of 2007 and, since then, has been shedding jobs at an increasing rate. While these numbers paint a bleaker picture of employment in South Carolina, they also show that the South Carolina economy seems to be moving more in tandem with the national economy. This suggests that, if the U.S. economy starts recovering in the beginning of next year, the South Carolina should realize a faster recovery compared to the usual six month lag observed in the previous recessions.o

                     Paulo Guimarães, 03/25/2009