The most reliable of the state Department of Labor's three sets of employment numbers tells us that Alaska's current economic performance and outlook are not quite as benign as many people have been led to believe. Instead of employment growing by 0.5 percent in 2009 as had been reported in the least reliable numbers, it actually fell by 0.5 percent (1,600 jobs).
But almost nobody knows about it because the least reliable are also the most widely discussed.
Worse, so far this year the least reliable numbers appear to be missing the boat again. As of June 2010, they show that Alaska statewide employment is up this year by about 1.2 percent. The truth is probably more like down 1.2 percent (another 3,800 jobs).
Here is why.
The problem is that the least reliable numbers come out first. They are gathered via the Current Employment Statistics survey and are then first published about two months later in the department's monthly Alaska Economic Trends publication. The most reliable data are gathered as part of the Quarterly Census of Employment and Wages but are available only four to six months after the CES numbers are published in Trends and are not widely available in print.
So why do I think the Current Employment data that are published in Trends are off again?
Answer: I look at other data. One such bit of Department of Labor data that gets little attention is the New Hires data series that originated in the early part of this decade but appears not to have caught much public attention. Just as are the QCEW data, new hires are gleaned from unemployment insurance filings and for that reason can be viewed with some confidence.
Between the third quarter of 2008 and the third quarter of 2009 statewide, new hires fell by 9.4 percent, mirroring the weakness in the Alaska economy that showed up in the 0.5 percent Quarterly Census employment decline for 2009, but which was obscured by the relatively benign 0.5 percent 2009 growth shown by the Current Employment numbers published in Alaska Economic Trends.
The most recent numbers tell us that things may be getting worse.
Between the first calendar quarter of 2009 and that of 2010, Alaska new hires were down by 12.4 percent, thereby showing a worsening trend that is in stark contrast to the 1.2 percent positive employment growth shown by the June Current Employment jobs numbers. That large a decline in new hires is not consistent with a rebound in employment growth. Something is amiss. The answer is that the Current Employment jobs numbers cannot be relied upon to tell an accurate story in times of economic change.
So let's cut to the chase.
I said in my Jan. 2 column that nonagricultural employment would be down 1 percent to 2 percent in both 2010 and 2011. I see no reason to change that forecast. And let us not forget the self-employed, who do not show up in either the Current Employment or Quarterly Census. My sense of it is that when they are factored in, the job situation is even worse.
Author note of caution: The Quarterly Census numbers are used to produce the finally revised Current Employment numbers that are posted in an Excel document at the Department of Labor website, www.laborstats.alaska. gov. For that reason, the finally revised Current Employment numbers in the Excel document look very much like the more reliable Quarterly Census numbers. So if you want to double-check what I have to say here, you have to pull up the archived issues of Alaska Economic Trends. These are also available at the Department of Labor website.
David M. Reaume holds a doctoral degree in economics. He lived and worked in Alaska for 22 years before moving to Washington state in 1999. His opinion column appears every month in the Anchorage Daily News.
DAVID REAUME
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