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State Cherry Picks Unemployment Numbers

Comments | Posted in News | By MacIver Institute | Posted June 21, 2010 8:25 AM

MacIver News Service [Madison, Wisc...] The numbers don’t lie when it comes to Wisconsin’s unemployment situation, but they tell different stories depending on who is reporting the news.

Last  week the Wisconsin Department of Workforce Development, the Associated Press and the Milwaukee Journal Sentinel all had vastly different interpretations of May’s unemployment figures.

The State of Wisconsin emphasized 40,000 new jobs were created in May and the unemployment rate was 7.7%. Meanwhile the Journal Sentinel reported the state lost 7,900 jobs and the unemployment rate was 8.2%. The Associated Press asserted that 40,000 new jobs were created and there was an 8.2% unemployment rate.

The reports are different because the organizations were working with two distinct sets of numbers. When the state collects unemployment figures each month, it compiles the data by seasonally adjusted and not seasonally adjusted. Seasonally adjusted numbers take into account seasonal workers (like those who work in tourism or landscaping), while the unadjusted numbers show the total number workers in the state.

Economists prefer to work with the seasonally adjusted numbers, because they say it provides a truer picture of the economy. Those are the numbers the Journal Sentinel focused on in its story about May’s unemployment. The state focused on the not seasonally adjusted numbers, which painted a rosier picture of the state’s economy.

“The Doyle Administration’s spin on the recent jobs report masks a reality that’s all too clear to economists, employers and those underemployed or out of work. Government jobs and short-term stimulus work are no substitute for the private industry prosperity we desperately need to help Wisconsin families and businesses thrive long-term,”said Senator Alberta Darling, R-River Hills.

DWD does not always lead with the not seasonally adjusted numbers in its monthly press releases. Sometimes the seasonally adjusted numbers are more positive, and that’s what the state leads with.

In fact, May was the first month this year that DWD focused on the non-seasonally adjusted numbers. The last time DWD went with not seasonally adjust numbers was in December.

Both sets of numbers usually appear in the state’s press release, but the less appealing numbers are buried in the story.

When we take into account the seasonal adjustment, instead of adding 32,000 private sector jobs, the Wisconsin economy lost 7,900 private sector jobs in May. The net change from a year ago is a loss of 37,400 jobs in the private sector.

In seasonally adjusted terms, 3,700 jobs were lost in in the hospitality sector in May and 6,700 jobs were lost since last year. In non-adjusted numbers leisure and hospitality may have added jobs in the last month, but there is still a loss of 7,500 jobs since last year.

Overall, in May Wisconsin’s economy (both private and public sector) added 1,600 jobs in seasonally-adjusted terms, as opposed to the “tens of thousands” that the governor claimed.

The discrepancy has touched off a political tussle.

“Sadly, the Democrats here in Wisconsin made it clear they’re much more worried about their own jobs than the 100,000-plus jobs we’ve lost under their leadership," said State Republican Party Chairman Reince Priebus. "They’re trying to pretend their actions don’t have consequences, and now they’re finding out that they can’t ‘spin’ the economy into recovery.”

An official with the Doyle Administration didn't dispute the private sector job loss numbers, but did issue a statement chastising the reporting done on the matter.

"Several media outlets misrepresented state employment figures released yesterday by the Department of Workforce Development," said Deputy Administration Secretary Dan Schooff on Friday. "The figures reported yesterday relating to state government employment and hiring used by the federal Department of Labor can be easily misconstrued. In the most recent report they indicated that the state hired 2,900 new employees (not seasonally adjusted). They also indicated that the state hired 3,100 new employees (seasonally adjusted), as was reported by several media outlets."

The MacIver News graphic below shows the first sentence in the Department of Workforce Development's monthly unemployment press releases for the last six months, which shows the Administration does not have a standardized way of reporting unemployment figures.