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June 5, 2008
The Texas Workforce Commission has recently published fourth quarter Covered Employment and Wages data (CEW) along with updates to several previous quarters. The CEW data are the basis for benchmarking the payroll employment data. TWC releases rebenchmarked payroll figures once per year, with the next update not scheduled until March 2009. For several years the Dallas Fed has undertaken to estimate more up-to-date payroll employment figures by incorporating CEW data as they are released quarterly by TWC.
Benchmark Results
Fourth quarter 2007 payroll employment growth is now estimated to be at an annual rate of 3.6 percent. The initial unbenchmarked growth rate was 2.9 percent. The FRB Dallas benchmarking program has resulted in an average upward revision of 1.2 percentage points over the past 13 quarters. The only downward revision during that time was for third quarter 2007, although even in that quarter, private employment growth was revised up, if only slightly.
An unexplained large decline in employment in local government education services (primarily public school teachers) brought the third quarter 2007 revision for total payroll employment into negative territory. The newly benchmarked fourth quarter shows a strong rebound in this sector, however. As mentioned in the April 22 edition of this report, there may be a problem calculating reliable seasonal adjustments during this period, due to the changing school year calendar in many Texas school districts.
Chart 1
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With the inclusion of the newly available fourth quarter 2007 CEW data and revisions to earlier quarters, total Texas payroll employment growth for 2007 stands at 3.5 percent. This compares with TWC’s published figure of 2.5 percent, which is based on out-of-date CEW data, and the national rate of 0.8 percent.
Chart 2
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Recent Employment Performance
Texas payroll employment growth has averaged an annualized 2.3 percent through the first four months of 2008. This compares with a decline in U.S. employment over the same period of 0.6 percent. Recalling that the Texas figure is still subject to benchmark revision, it may be that real employment growth over this period has been somewhat higher. There is no guarantee of this, however. When first quarter 2008 CEW data are published around the end of August, we will have a better sense of recent Texas employment performance.
—Franklin D. Berger
| About FRB Dallas-Adjusted
Employment Data CEW
data are published on a quarterly basis.
The Dallas Fed uses this new information
to estimate the TWC final series as soon
as these data are published. The TWC revises
its payroll employment estimates once per
year, with the release of January data in
March.
FRB-adjusted employment
has been very useful in anticipating TWC’s
final revisions. Over the most recent 12 quarters for which final results are available
(fourth quarter 2004 through second quarter
2007), Dallas Fed adjustments have resulted
in an average upward revision from the initial
TWC estimates of 1.4 percentage points.
These Dallas Fed adjustments have underestimated
final TWC data by only 0.2 percentage points.
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