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The state also releases jobless rates and job-growth numbers, which are not seasonally adjusted, for Thurston and other counties.
The monthly data appear to be straightforward information about the state and local economies, but it’s not as simple as that. The 8.7 percent jobless figure and strong job creation last month are preliminary data on the statewide economy and are subject to future revisions – which might lower or increase both data sets.
Because the process isn’t as simple as it sounds, we asked Sheryl Hutchison, communications director for Employment Security, to take us behind the scenes.
How are unemployment figures produced every month?
All of our statistics on the monthly unemployment rate and the number of jobs created come from surveys produced by the U.S. Bureau of Labor and Statistics.
There are two surveys. One is a household survey, and it’s done nationwide with a sample in every state and asks, are you working? And if not, are you looking for work? It also inquires about demographic information. They compile the numbers and send them out to the states.
The thing to keep in mind is that the household survey is a very small sample size and has an error rate of plus or minus seven-tenths of one percentage point. If the jobless rate is 9 percent, it could be 9.7 percent; or it could be 8.3 percent.
We always caution people against putting too much stock in any one month’s number because there is a lot of play and a lot of revision. The preliminary number almost always is revised. It shows us a picture over time, because it’s not an absolute number. The survey that shows the number of jobs created is a much larger sample size – 6,000 businesses compared to just under 1,000 individuals for the household survey – and has an error rate in the range of plus 2.22 percent or minus 1.18 percent.
What are some common misconceptions about the data?
One thing people tend to assume is that the jobless rate reflects only those receiving jobless benefits. That is not the case. It’s the percentage of people who are unemployed and actively seeking work.
Something else we see is that people want to know more about discouraged workers or those workers who have given up looking for work. They aren’t factored into the official unemployment rate, but we do collect that information. The jobless rate for discouraged workers is usually five or six percentage points higher.
If you have discouraged worker data and other categories of unemployment data, why not include it in the state’s monthly releases on unemployment?
It’s a lot of excessive detail that can become complicated when people are looking for a simple snapshot in time about the economy.
How come you don’t do seasonal adjustments at the county level?
The survey sample size at the county level is too small to do seasonal adjustments, but we can do that at the statewide level.
The intent of seasonal adjustments is to wipe out or at least soften normal seasonal variation. For example, in the summer, you have construction jobs that tend to swell the work force, and in the winter, you have seasonal changes due to the holidays. But that’s normal and you’d expect that, so we kind of adjust for that so it doesn’t unduly influence, either up or down, the number of jobs created and the unemployment rate.
There are no adjustments at the county level so that you can see those bounces – it can swing wildly – but it takes out normal variation so you have a little more constant picture of what’s going on in the economy.
The state used to release the county and statewide unemployment numbers on the same day. Why are they now released a week apart?
The federal government told us to do that. This is their data, and they get to tell us the terms under which we can release it. They also wanted another week to focus on the local numbers to make them more accurate. The change took place at the beginning of the year.
Rolf Boone: 360-754-5403
rboone@theolympian.com
www.theolympian.com/bizblog
