Michael Lucas comments on July 1painting a bleak picture of Wisconsin’s employment situation. For comparison, here are some other aggregate figures, including the Philadelphia Fed’s coincident index, released today.
Figure 1: Wisconsin nonfarm payrolls (dark blue), Philadelphia Fed early benchmark NFP (pink), civilian employment (beige), real wages deflated by national chain CPI (light blue), GDP (red), coincident index (green), all in logarithms 2021M11=0. Source: BLS, BEA, Philadelphia Fed (1), (2)and the author’s calculations.
The coincident index shows rapid growth in recent months (revising upwards the May figure). This is interesting since the coincident index is based mainly on labour market indicators.
In his article, Mr. Lucas points out that more reliable employment indicators have shown a decline in the number of jobs, namely:
The job loss over the past year can be most easily seen by referring to the BLS’s QCES survey, a lagging indicator of the economy that is among the most accurate and comprehensive surveys available. According to the survey’s data, Wisconsin gained a net total of 8,099 jobs between the first and third quarters of 2023 (fourth quarter data is not yet available). However, during the second and third quarters, Wisconsin lost a net total of 20,207 jobs.
He presents this table to support this argument.
Source: Lucas (2024).
Apparently Mr. Lucas is unaware that QCEW data is not seasonally adjusted, so only the q3/q3 calculation really makes sense.
Personally, I don’t know about QCES (if you know it, tell me what it is). Am familiar with the QCEW, which is not a survey, but a census (hence the “VS” in QCEW).
I trace changes in employment from the BED (a survey), the QCEW and the CES.
Figure 2: Change from fourth quarter 2021 in Wisconsin nonfarm private payroll employment from the Current Population Survey (CPS) (blue), Quarterly Census of Employment and Payrolls (QCEW) (green), and Business Employment Dynamics (BED) survey (beige), all in thousands. QCEW series seasonally adjusted by the author using X-13 (log transformation) on monthly data. Source: BLS and author’s calculations.
To highlight the importance of seasonal adjustment, compare nsa QCEW and sa QCEW…
Figure 3: Wisconsin nonfarm private payroll employment from Current Population Survey (CPS) (blue), from Quarterly Census of Employment and Payrolls, unadjusted (QCEW) (light green), from Quarterly Census of Employment and Payrolls (QCEW) (green), all in thousands. QCEW series seasonally adjusted by author using X-13 (log transformation) on monthly data. Source: BLS and author’s calculations.
