Thursday, March 14, 2019

Georgia employment in 2018: Where it went wrong

Up until March 11, 2019, Georgia had a good jobs story to tell. The state appeared to be growing faster than the nation with employment up by 2.6% in 2018, its fastest job growth rate since the end of 2015.

Then the U.S. Bureau of Labor Statistics published the benchmark data for 2018 and the Georgia story went up in smoke.

With the revisions, the number of new jobs added in the state last year dropped from 119,200 to 87,500 and the job growth rate fell to 1.9%.

When normal statistical variance is factored in, Georgia’s employment growth turned out to be little better than the nation as a whole.

Using the newly benchmarked information as a measure, Georgia’s job growth rate ranked 10th in 2018 and behind its neighbor states of Florida and South Carolina.

Industries revised downward

For Georgia, several sectors stood out as having over-estimated job growth in 2018.

Employment in the construction industry was revised down by 9,900 jobs for 2018.

Employment in wholesale companies was decreased by 13,900 jobs, the second straight year that employment in wholesale firms had been significantly overstated in the preliminary figures.

The number of workers engaged in health care and social assistance dropped by 8,400 over the year.

Industries revised upward

The net revision downward of 31,700 jobs would have been even worse if employment in a couple of industries had not been underestimated.

The number of workers employed in financial activities was revised up by 9,000. Within this group, both the finance and insurance sector as well as the real estate sector had employment counts significantly revised upward. The upward revision follows a similar upward revision in the 2017 numbers.

At the same time, employment in private educational services was raised by 4,800.

In general, Georgia’s growth in financial activities has been underappreciated even if its construction sector was overestimated.

Producing a monthly employment count is always a hectic experience and prone to revision as better data comes in later in the year.

It is important that estimates be as accurate as possible, but it is also important to remember that these numbers are just estimates and better at providing a direction to the larger economy rather than providing absolute confidence, especially for small samples.