MJP –
We were wondering, “How does California look?” after last week’s announcement that US job growth was probably a third lower than initially recorded by federal employment trackers.
The most recent changes to the national employment count revealed a decrease of 2.1 million jobs in the United States for the year ending in March, down from the previously reported 2.9 million.
This is the first of two analyses of hiring trends for 2024, and the results show that the country had 818,000 fewer new employees than anticipated.
Revisions to state data will not be made until next year due to the yearly publication of these evaluations. Current monthly data reveals that in the year ending in March, California bosses added 207,000 jobs.
A spreadsheet I rely on examined the Quarterly Census of Employment and Wages, which provided the essential data for the much-discussed changes to the national job figures. These figures will be used to determine the adjustments to the state in the future.
Adding 267,000 jobs in the year ending in March is a surprising number, according to QCEW. Indeed, sixty thousand more positions than anticipated. Almost 30% more new employment have been created.
Just how is that?
While large statistical discrepancies like this could inspire “government work” jokes, the differing figures have a mathematical basis.
Look, most economic data is just estimations of company trends, and everyone from politicians to economists to Wall Street analysts—even the media—tends to exaggerate these findings.
Think about the monthly employment statistics that come out right after the month finishes. This data is derived from polls that were administered to almost 100,000 employers across the country. The margins of error, as we witnessed last week, can be quite little or quite large, depending on the poll in question.
The quarterly QCEW is the foundation of the monthly data revisions, so compare and contrast that math with it. Using data from over 100 million workers’ employer-filed unemployment claims, it compiles its figures. The better jobs tally is generally acknowledged.
Instead of going into detail about the QCEW, why not simply document it? There is, however, a catch: finishing the survey takes longer than four months.
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This is about the state of the labor market in March, as revealed by the most recent QCEW survey. Nevertheless, we can deduce something about July from the much-maligned monthly data.
Politicians, media, and the general public would have to endure an excruciatingly lengthy wait in a society where everyone is always asking, “What have you done for me lately?”
How else might we infer information about the March job market in California from the QCEW?
Job Seekers: With 18.1 million people employed, California has consistently ranked as the top job market in the nation. It accounts for twelve percent of all jobs in the United States. Second place went to Texas with 13.8 million, followed by Florida with 9.9 million.
The 267,000 new jobs added in California accounted for 14% of all job additions in the United States, placing it first again. Texas came in at 231,000, while Florida ranked third with 203,000. Oregon was the lone state to have a decrease, falling by 6,000.
Compared to the rest of the country, California’s 1.5% annual job growth ranked 20th, outpacing the national average of 1.3%. Following in order of importance: 2.9% in Arizona, 2.4% in Nevada, 2.2% in Alaska, and 2.1% in Florida. At 1.7%, Texas ranked thirteenth. Oregon fell 0.3%, followed by 0.2% increases in Minnesota and Mississippi.
As for wages, the Golden State ranked fifth in the nation with an average weekly wage of $1,833, 20% more than the national average of $1,527. New York at $2,089, Massachusetts at $2,015, and Washington, DC at $2,434 are at the top. No. 12 on the list was Texas with $1,540, while No. 20 was Florida with $1,384. At its lowest? Next on the list is Montana at $1,126, followed by West Virginia at $1,110, and Mississippi at $980.
Pay raises: California’s 5.5% annual salary increase placed third, outpacing the national average of 4.2%. Ranked first are Alaska(5.6%) and Indiana (5.7%). At 4.1%, Texas was 22nd, and at 4.2%, Florida was 20th. At its lowest? Nebraska at 2.6%, Illinois at 2.7%, and Wyoming at 2.8%.
In Conclusion
Job revisions prove that economic estimates are, at best, guesstimates, according to those who naturally doubt the validity of most business statistics.
To be fair to those who question the veracity of the data, fluctuations in the benchmarks you follow over the near term are just indicators of a trend.
That being said, the information world is always open. Investing opportunities are available practically continuously. Plus, every single day, people make judgments about their businesses, whether they’re corporations or individuals.
So, whatever the most recent figures are, they have some merit. “Some value,” I remarked.
To make sense of significant economic shifts, it is necessary to gather and analyze data over extended periods. This is the most important takeaway.
Consider the 1.5% yearly increase in jobs in California as of March, as reported by the QCEW. Perhaps it sheds light on why some trends persist, such as exorbitantly high property prices, congested highways, and overflowing mall parking lots.
But these employment numbers are just a snapshot in time—from the tail end of last winter, to be exact—of the recruiting process. This is the final week of summer.
Plus, looking at the big picture, it’s not exactly a hiring binge: between 2012 and 2019, before the coronavirus reshaped the economy, jobs in California rose at a pace of 2.4% per year.
