Wednesday, June 13, 2012

Oregon Jobs: Real Growth or Data Quirk?

In yesterday's post, we discussed how the factors used to create seasonally adjusted employment numbers were not overstating Oregon's job gains in the first quarter of 2012. Today, an article from The Oregonian addresses a different data concern related to monthly payroll job estimates.

The employment situation released yesterday showed that Oregon added 6,900 jobs in May. That's the largest single-month employment gain in Oregon since January 2011. Oregon's monthly employment trends have moved counter to the U.S. in recent months. As national employment numbers showed sharp improvements in the first quarter of 2012, Oregon's numbers sagged. The healthy May report for Oregon comes on the heels of notably slower job growth nationwide.

Several economists in Oregon tell The Oregonian that the state hasn't actually veered onto a separate path than the nation. Rather, changes in the way the Bureau of Labor Statistics (BLS) produces job estimates now makes the data more volatile than it has been in the past. For many years, monthly employment estimates for Oregon and its metropolitan areas were developed by Oregon Employment Department economists. In March 2011, responsibility for the monthly employment estimates for all states and metropolitan areas shifted to the BLS. The estimates developed by BLS analysts are more heavily dependent on a survey of businesses and less reliant on knowledge of local economic events. The effect in some states, including Oregon, is that monthly estimates have demonstrated increased month-to-month variability. 

Nick Beleiciks, our state employment economist, noted that the state added 13,200 jobs between May 2011 and May 2012, and that three-fourths of those gains were reported  within the last two months. The BLS figures show that employers added 10,000 jobs in April and May combined. University of Oregon Economist Tim Duy commented that the latest monthly figures likely reflect underestimates from previous months and we're now "finally catching up to some of the reality of the situation". State Economist Mark McMullen said the takeaway point is that Oregon’s economy is slowly recovering, which is in line with the U.S.

Last, but not least, it is important to note that although Oregon added 6,900 jobs in May while the U.S. added 69,000, that does not mean that Oregon accounted for 10 percent of the nation’s job growth. Oregon’s employment estimate isn’t intended to be combined with other states to estimate the national employment figure. The U.S. payroll numbers use the same estimation methods, but have a different sample of businesses.

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