Michigan Job Growth Better Than Reported

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Michigan exceeded U.S. job growth and added twice as many jobs as has been reported from the first quarter of 2012 through the first quarter of this year, according to a report released Monday by Don Grimes, an economist at the University of Michigan Institute for Research on Labor, Employment, and the Economy.

The news comes after last week’s release of the Quarterly Census of Employment and Wages data, which is based on administrative records of employers’ tax payments for unemployment insurance for their workers. Before the release, reports had relied on Current Employment Statistics data, which is based on a survey sample of several hundred thousand businesses and government agencies.

While the CES data showed Michigan added 42,867 jobs, or 1.1 percent job growth from first quarter of 2012 to the first quarter of 2013, the QCEW data shows that Michigan actually added 85,245 jobs, or 2.2 percent job growth.

Both data sets are used by the Bureau of Labor Statistics to estimate job growth, but as the QCEW is based on an actual count of employees, it’s considered more reliable. In addition, the CES is benchmarked to the QCEW series every winter, so the bureau also regards it as more accurate.

“The CES data is eventually revised to correct the underestimate, but in the meantime the misleading ‘story’ of how the Michigan economy is performing, based on the CES data, keeps getting reported,” Grimes said in a statement. “The job change number gets a lot of attention when the national data is released on the first Friday of every month, and the state and local data later each month. 

“But for several years, the CES has been substantially underestimating employment growth in the state of Michigan and some other states.”

The two reports are supposed to generate similar counts of wage and salary employees, along with nearly identical counts of the changes in employment, but for the past few years in Michigan they haven’t, Grimes said.

“I think this is really important, both because it calls into question the accuracy of some ‘official’ data and because the underestimation of employment growth encourages greater pessimism by the state’s citizens than is warranted,” Grimes said.

The underestimate in Michigan is most noticeable in construction, business, and professional services as well as the leisure and hospitality industries, Grimes said. The CES data appears to be accurate in measuring the growth of employment in manufacturing and in the private education and health services industries.

In other economic news, Oakland County outpaced the region and the state in job growth in the first quarter of 2013. Employment in the county improved by more than 25,000 jobs, or 3.9 percent, during the period. In comparison, employment in the Detroit-Warren-Dearborn Metropolitan Statistical Area and Michigan grew by 2.6 and 2.2 percent, respectively.

The county has added more than 70,345 jobs since the first quarter of 2010. In a statement, Oakland County Executive L. Brooks Patterson attributed the growth to the county’s Emerging Sectors program, which identifies and fosters development in top growth sectors.

“We lost 60,000 jobs in 2010 because of the GM and Chrysler bankruptcies,” Patterson said. “Now we have replaced those jobs, and then some.”

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