Now Entering The Labor Statistic Spin Zone
In dueling press releases Thursday, the Democratic and Republican parties offered their own interpretations of the labor statistics released Thursday. The pictures they painted differed greatly.
According to Democratic Party Chairwoman Nancy DiNardo, the news that Connecticut gained 2,300 private sector jobs last month was good news and “a clear indication that we are on the right path.”
The state also lost 6,000 jobs, mostly from job losses in local government.
According to Republican Party Chairman Jerry Labriola Jr., Thursday’s employment numbers mark “17 consecutive months of an unemployment rate higher than the national average.” The unemployment rate remained unchanged at 8.1 percent, according to the Labor Department.
“As many states begin to enjoy recovery, Dan Malloy’s assault on the Connecticut economy continues to prevent growth and stifle job creation,” Labriola continued.
DiNardo countered that Democratic Gov. Dannel P. Malloy’s administration is moving the state forward.
“In fact, the first two-and-a-half years of the Malloy administration represent the best two-and-a-half year period of private sector job growth since the late 1990s,” DiNardo said. “The governor always says that there is more work to be done, but his leadership is moving us forward to where we need to be.” She said there have been more than 40,000 private sector jobs created during Malloy’s tenure.
Tom Foley, a possible Republican gubernatorial contender, said the Labor Department’s numbers show Connecticut lost another 1,400 jobs in August. He said that brings the total number of jobs lost under the Malloy administration to 34,100.
How can the numbers offered by the two sides be so far apart?
Republicans are relying upon the household survey of 1,600 Connecticut residents, while Democrats are pointing to a payroll survey of numbers reported by 6,500 employers.
The number of unemployed since Malloy took office in January 2011 has gone up by about 34,100, according to the latest numbers from the household survey. The payroll survey shows that about 44,000 non-farm jobs have been created during that same time period.
Economists tend to rely more heavily on the payroll survey of employers than the household survey, but both numbers have been reported on a monthly basis by the Labor Department for about three years.
Andy Condon, director of the Labor Department’s Office of Research, said Friday that the numbers in the survey have been going in opposite directions the entire time that both have been reported. He said they are still “looking at all possibilities to figure out how to explain this.”
But fundamentally, the two are measuring different things. The payroll survey measures jobs and the household survey measures mostly the size of the labor force, Condon said.
In a phone interview Friday, he said that instead of adding clarity the two sets of numbers tend to “confuse.”
Which may be good news for politicians on the stump in 2014 looking to convince voters they’re better at creating jobs than their opponent. That means they are latching onto any tidbit of information reported to back their argument.
The Democratic Party issued a press release touting Thursday’s statement from Connecticut Business and Industry Association Economist Pete Gioia.
Gioia, who comments every month on the employment figures, expressed optimism about the August job numbers.
But he warned Friday that politicians “should not take as much credit for good news, and should not take as much blame for the bad.”
In general, Gioia said he relies on the payroll survey, which showed the state gaining 2,300 jobs in the private sector in August.
“You had 2,300 jobs added in the private sector. You can’t get too negative on that,” Gioia said Friday.
But even with moderate and modest gains in employment in the private sector, the state won’t recover all the jobs it lost during the recession until 2016, Gioia said.
That’s well after the 2014 race for governor.
According to labor statistics released Thursday, the state added 14,300 jobs in the first eight months of the year. But in order to fully recover from the 2008 recession, it needs to add 59,000 jobs.
Regardless of which numbers are used, Fred Carstensen, an economist at the Connecticut Center for Economic Analysis, said he finds it “odd” that the Democrats are arguing that government jobs don’t matter since income from those jobs is used to purchase goods and services. He said the weakness in the public sector is something that should be a concern.
While the private sector continues to make modest improvements, the public sector continues to contract and nationally sequestration has impacted economic growth by about one third, according to Carstensen.
But at the end of the day, “it’s not a constructive debate. They should be talking about what are the policies the state ought to be implementing,” Carstensen said.
He said the job numbers may be problematic for the Malloy administration because the long-term investments he has made won’t begin to deliver significant results for another three to five years.