Surprise! California job counts could be revised higher

When government employment trackers announced last week that US job growth was likely a third less than originally reported, we wondered: How does California look?

The latest revisions to nationwide employment counts showed 2.1 million American jobs were added in the year ending in March, compared with the previously reported 2.9 million.

So, the nation had 818,000 fewer new jobs than we thought, according to this first of two reviews of 2024 hiring trends.

Now, state data won’t be revised until next year, as these reviews are only published annually. The current monthly data shows California bosses added 207,000 jobs in the year ended in March.

My trusty spreadsheet reviewed the Quarterly Census of Employment and Wages – the same data that was key to the much-discussed national job data revisions. These are the numbers that will help set future state revisions.

Surprisingly, QCEW says California added 267,000 jobs in the year ended in March. Yes, that’s 60,000 MORE jobs than we thought. That’s almost 30% more new jobs.

How so?

Statistical gaps of this magnitude may be fodder for “government work” jokes, but there is numerical science behind the varying numbers.

Look, everybody – economists, politicians, Wall Street analysts and, yes, the media – overstates what most economic data actually is: estimates of business trends.

Take monthly jobs stats, which are released soon after a month ends. These numbers are based on surveys of 100,000 or so employers nationwide. Like any polling, there are margins for error that can be minor or massive, just like we saw last week.

Contrast that math to the quarterly QCEW, the backbone of the monthly data revisions. Its statistics come from reviewing employer’s unemployment insurance filings for 100 million-plus workers. It’s widely accepted as the better jobs tally.

So, why not just report on the QCEW? Well, there’s catch: It takes more than four months to complete the survey.

That means what the latest QCEW survey is showing us job market conditions back in March. The often-maligned monthly data, however, has already given us a hint at what happened in July.

In a what-have-you-done-for-me-lately world, that sort of delay would be an awfully long wait for policymakers, pundits and the public.

California dreamin’

What else does the QCEW tell us about California’s job market as of March?

Workers: California is the nation’s long-time No. 1 job market, with 18.1 million employees. That’s 12% of all US jobs. No. 2 was Texas at 13.8 million, and No. 3 was Florida at 9.9 million.

Added jobs: California’s 267,000 new workers also ranked No. 1 and equaled 14% of all US additions. No. 2 was Texas at 231,000, and No. 3 was Florida at 203,000. Only one state had a decline: Oregon, off 6,000.

Percentage growth: California ranked 20th with 1.5% more jobs in a year – better than the nation’s 1.3% growth. Tops? Arizona at 2.9%, then Nevada at 2.4%, Alaska at 2.2%, and Florida at 2.1%. Texas was No. 13 at 1.7%. Lows? Oregon, off 0.3%, then Minnesota and Mississippi, up 0.2%.

Wages: California ranked No. 5 at an average $1,833 a week, 20% above the nation’s $1,527. Tops? DC at $2,434, then New York at $2,089, and Massachusetts at $2,015. Texas was No. 12 at $1,540 and Florida, No. 20 at $1,384. Lows? Mississippi at $980, then West Virginia at $1,110, and Montana at $1,126.

Raises: California ranked No. 3, with wages up 5.5% in a year, compared with 4.2% growth nationally. Tops? Indiana at 5.7% and Alaska at 5.6%. Texas was No. 22 at 4.1% and Florida was No. 20 at 4.2%. Lows? Nebraska at 2.6%, Illinois at 2.7%, and Wyoming at 2.8%.

Bottom line

To folks who instinctively question the validity of most business statistics, job revisions are proof that economic figures are guesstimates, at best.

And to be fair to data doubters, short-term swings in whatever benchmarks you watch are merely clues to any trend.

Nonetheless, there’s a 24/7 information world. There are investments trading almost around the clock. Plus, business decisions – corporate or consumer – are made daily.

This gives some value to whatever the newest numbers are. Note, “some value,” I said.

The bigger lesson is understanding that noteworthy economic moves require a collection and review of longer-term stats.

Take California’s 1.5% annual job growth as of March, according to the QCEW stats. Maybe it helps explain certain patterns – like stubbornly high home prices, jammed freeways and crowded mall parking lots.

Yet these job figures are only one snapshot of hiring – and they’re from the end of last winter, no less. We’re now in the last month of summer.

Plus, historically speaking, it’s not any grand hiring spree: California jobs grew at a 2.4% annual pace from 2012 through 2019 – just before coronavirus rearranged the economy.