So, everyone, let’s all talk about the elephant in the room: The unemployment estimates out Friday.
Missed them? Well, if you were following along through the morning, you may have been confused about just when was the last time that preliminary estimates of unemployment rose in Maine. That may have been my fault. (It was a year ago, but we’re getting into whether we should pay that much mind either.)
The correction raised a good topic to discuss: Just what do we know on a month-by-month basis about unemployment in Maine, anyway?
The answer is, not too much. With good reason, it’s why the monthly tables from the BLS pick out states with a statistically significant change in preliminary numbers from one year ago. Maine was one of 45 states with a decline in unemployment from one year ago.
Sparing you the nitty gritty, the state-level monthly unemployment numbers are based on a survey of about 110,000 people across the country, the U.S. Census Bureau’s Current Population Survey. The survey is extrapolated to a broader population and unemployment estimates are later revised based on other and more detailed sources of information, which always require some amount of waiting.
That means there’s a bit of wiggle room for the monthly numbers to get adjusted up or down in a few months.
Rather than explain the impact this has on drawing any conclusions about how the economy is doing from month-to-month, I’ll turn to the great blog The Upshot, from The New York Times, which poses the chilling question, about national job estimates:
What if the apparent decline in job growth came from the inherent volatility of surveys that rely on samples, like the survey that produces the Labor Department’s monthly employment estimate?
Well, they created just such a world to show you, given absolutely flat job growth, just the types of trends you may be able to perceive based on that statistical noise. (Give that link a look. I’ll wait here, if you’d like.)
That’s the same dynamic at work in the monthly employment and unemployment numbers in Maine. And if you don’t believe me, take it from Glenn Mills, chief economist for the Maine Department of Labor’s Center for Workforce Research and Information.
So, as November nears and political scrutiny of how the economy is faring continues to rise, remember just how many grains of salt to take with those monthly estimates. And I will, too.