Report Says Government Was Off On Mass. Jobs Revisions

You could call it the revisions of the revisions.

A report out today from an economic journal argues for a better methodology for calculating revised jobs growth figures, after federal government revisions last month severely pared back the number of jobs it said were created in Massachusetts in 2011.

The calculation, from economist Alan Clayton-Matthews of the journal MassBenchmarks, finds that the state's job growth did in fact outpace the nation's last year.

"MassBenchmarks estimates that the number of payroll jobs (on a seasonally adjusted basis) for September 2011 is 3,241,600, or 36,600 more than the official payroll job count of 3,205,000 from the Bureau of Labor Statistics (BLS)," the journal says.

The Boston Globe spoke with a BLS division chief, who admitted that the MassBenchmarks calculation is "probably right."

Next year, officials told the Globe, the BLS "will adjust its 2011 estimates again using the same additional data on which [MassBenchmarks] based its analysis."

At issue is the methodology the BLS uses to calculate revised jobs figures for states. Clayton-Matthews says that under the current methodology, the "true, official history of employment in 2011 will not be known until March of 2013. There is no need to wait so long." He details:

The ... data are released quarterly with a lag of less than seven months. For example, the data for the July 2011 through September 2011 period was just released on March 28, 2012. Data for the last quarter of 2011 will be released at the end of June 2012. The BLS could re-benchmark the data quarterly instead of annually, but they don’t.

State labor officials criticized the BLS' methodology when the number of jobs Massachusetts employers added in 2011 was revised downward — by tens of thousands — in early March.

“We think that methodology results in Massachusetts numbers not reflecting the actual job growth for the year because one of our strongest quarters is the third quarter,” Massachusetts Labor Secretary Joanne Goldstein told me then.

Goldstein said other economic factors — such as the state's declining unemployment rate, higher payroll tax revenue and an increased business confidence — also led her to believe that the federal revisions were underestimating Massachusetts jobs gains.

As recently as yesterday, Gov. Deval Patrick had also criticized the BLS' methodology.

"It's incredibly frustrating," Patrick said on WBZ-AM, according to State House News Service. "In simple terms, they decided not to count the second half of the year."