The U.S. Bureau of Labor Statistics says Colorado’s employment numbers released in early March are supposed to be based on official information, but are still estimates.
The Colorado Department of Labor sought to hush up incomplete employment and wage numbers collected from businesses, even though the BLS pointed to unreliable data. This data is used at both the federal and state levels to provide a clear picture of how many jobs have been gained or lost. lost.
Colorado employment statistics are refined throughout the year using something called the Quarterly Employment and Wage Survey (QCEW). It is sourced from unemployment insurance reports, and businesses across the country are legally required to submit this information. This makes it a much more reliable data set than the original monthly employment report, which was based on self-surveys.
QCEW data is the gold standard for calculating employment growth. But the U.S. Bureau of Labor Statistics, which works with states to compile economic statistics, says Colorado’s statistics have been “unusual” since last July. According to a note on the BLS website, this number was so unstable that it could not be used for the 2023 annual benchmarking process. Instead, third-quarter numbers were extrapolated using data from previous months to fill in the gaps.
“Revised benchmarks for Colorado for March, September, and December 2023 are provided and should be interpreted with caution,” the BLS said on its website.
The reason for the bad data is a review of the state’s unemployment insurance premium system. When the Colorado Department of Labor held a press conference on its annual benchmarking process earlier this month, it did not warn of any unusual activity or point out that some of the data presented was incomplete. A spokesperson for the Colorado Department of Labor did not directly respond to CPR’s questions about why the data issue was removed from discussion.
The QCEW figures support a vast range of economic forecasts and analysis. For example, the U.S. Department of Commerce uses this data to calculate personal income, and the Social Security Administration uses it as a quality check on information submitted by the Internal Revenue Service. This is an important element for both individual states and the federal government in understanding how the economy is working.
At this time, the Colorado Department of Labor cannot say exactly when collections will be available. A ministry spokesperson said the latest figures were still reliable despite containing “much more incomplete data than usual that requires extrapolation.”
“Under the new reporting system, some employers reported employment and wage data in a manner that left certain imperfections,” a spokesperson said in an emailed statement. “We have been working to increase employer understanding of the new system to improve reporting in coming quarters.”
Gov. Jared Polis declined to comment when asked about disclosing the data problems.
Colorado economist Ryan Gedney said it’s common for systems to have problems collecting data as they modernize.
“When we were launching a new system in the third quarter, there was always a risk that something like this could happen,” Gedney said in an interview. “Unfortunately, something happened… If it was just a quarter, OK, it’s a small surprise or a break in the series. We could somehow get over it… but if it’s even more… If you scale it up, it’s obviously going to be a long-term problem.”
Colorado’s data collection problems could also cast doubt on the strength of the state’s recent job growth. In a March 11 conference call with reporters, Gedney said the annual benchmarking process showed Colorado added 37,000 more jobs in 2023 than previously reported.The jump pushed Colorado up to 11 points.th Gedney said the state ranks high compared to other states in terms of job growth. Previous estimates had Colorado in the bottom 15.
However, due to the data leak, the information for three months of that period is still an estimate. Gedney said he was confident in the numbers and how they were calculated for the months where data was missing. He noted that the QCEW data showed that for the months in which it was completed, early estimates consistently undercounted employment.
It may take some time before the state answers additional questions from reporters about employment statistics. Gedney will leave his post this month and the state will cancel monthly news conferences on the state’s unemployment numbers.
The Quarterly Employment and Wage Survey (QCEW) is used to provide a complete picture of the economy as a whole and is regularly reported on by CPR and many news outlets.
Other ways QCEW is used across the country include:
- The Energy Information Administration uses this data to collect information on gas prices across the country, which is widely shared with the public and policymakers. This is one of the most viewed information by governments.
- In addition to quality checks, the Social Security Administration uses the data to establish an average wage index. Average wage indexing is used to set contribution and benefit standards and adjustments to other wage-indexed amounts.
- The Department of Employment and Training uses QCEW to measure unemployment insurance earnings. and national, state, and local employment.
- States also use monthly QCEW employment data to calculate the insured unemployment rate that triggers federal state extension benefits.
- Businesses, public and private research organizations use it for economic forecasting, transportation planning, industry and regional analysis, and impact studies.
- Educational institutions use QCEW data for labor market understanding, economic research, and career planning.
