U-M Economist Says Feds Shortchanging Michigan by Tens of Thousands of Jobs

The monthly U.S. Bureau of Labor unemployment report that generates most of the national media stories is “seriously wrong” and shortchanging Michigan of tens of thousands of jobs every year, according to a University of Michigan economist.

The monthly unemployment data from the Current Employment Statistics (CES) report has been under-reporting Michigan job growth since 2011, Don Grimes said.

Grimes says another BLS unemployment report done every three months — the Quarterly Census of Employment and Wages (QCEW) — consistently shows more job growth in its survey than the monthly CES report. Grimes said the QCEW report shows that Michigan added about 50,000 more jobs in the year to March 2014 then the CES data shows.

The QCEW report is a larger sample and a more comprehensive look at Michigan employment.

“There is something seriously wrong with how BLS extrapolates the employment numbers from the sample used in the CES,” Grimes said.

Grimes said CES data under-reported Michigan’s job growth by 39,600 jobs during the year to March 2012, and another 37,300 jobs during the year to March 2013. He estimates the CES is will be short about 50,000 jobs in the year to March 2014 when the next revision is made.

Grimes said the CES data accurately reflects the job growth once it is eventually benchmarked to the QCEW, but the initial data for Michigan has recently been far too low.

He said that the under-estimating of jobs has also occurred in Ohio and Indiana.

Michigan did have larger revisions in 2012 and 2013 than from 2008 to 2011, according to Chris Manning, the BLS Division Chief, CES State and Area.

“Absolute revisions for March have averaged 0.50 percent from 2008 to 2013,” Manning said in an email. “This is slightly below the absolute average for all states during the same time frame (0.55 percent). However, the absolute revisions for Michigan for the past two years were larger than the absolute revisions from 2008-2011.”

Manning said the revisions for Michigan in 2012 and 2013 were middle-of-the-pack when compared to the revisions made to all states.

BLS will release 2014 benchmark revisions for CES State and Area estimates in mid-March of 2015.

The QCEW survey is done by tracking employment and wage information covered by state and federal unemployment programs. The CES is a survey of about 144,000 businesses and government agencies that represent about 554,000 worksites nationwide.

The table nearby shows benchmark revisions in March for the past few years. The information can be found here.