Another Angle on Job Growth

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Jon Lansner, proprietor of the excellent Orange County Register real estate blog, pointed me at an alternate source of local job data after reading my recent article questioning the accuracy of the monthly BLS/EDD employment statistics.

Like the monthly job report described in the latest article (the Current Employment Statistics or CES), this other data is also put together by the Bureau of Labor Statistics (BLS). It is called the Quarterly County Employment and Wages (QCEW) report and a whole slew of information on it can be found here.

As the name would imply, the QCEW report is released quarterly instead of CES's monthly release. The bigger difference is in the time lag, though: whereas the CES reports on the most recent month's employment, the QCEW reports on the calendar quarter that ended just over 6 months prior. This lag would explain why it doesn't get a lot of press -- people want to know what's happening now, not what was happening half a year ago.

The QCEW has one big advantage, however, and that is accuracy. The monthly CES samples 400,000 business nationwide and uses statistical techniques to fill in the blanks. (The crux of my prior article, incidentally, was that these techniques seem to assume steady job growth and may fall behind at turning points -- the present time possibly being one of those points). The QCEW, in contrast, is based on the records of almost 9 million business nationwide. No filling in of the blanks is required.

The QCEW may be late, but it provides a better picture of what was actually going on as of its most recent snapshot.

With that explanation behind us, let's have a look at what the most recent QCEW release indicates was happening in San Diego last summer. The accompanying table displays the percent change in employment from June 2006 to June 2007 for the three housing-related sectors I've often discussed as well as for San Diego overall. It turns out that while the overall employment number was a match for the CES estimate, the CES was actually overstating job losses (or understating gains, in the case of trade) for the three housing beneficiary sectors.

So the statistical models were slightly too pessimistic as of last June. I'd be more interested in knowing how accurate they were as of last month. But for this, we will have to wait.

-- RICH TOSCANO