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Labor Stats Cry Out for Explanation

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With the release of June labor data we are once again treated to a set of numbers that simply don’t make sense. There are two problems. First, and most important, we are informed that private sector employment rose by 11,700 from June 2013 to June 2014—a growth of about one percent, not bad, but a far cry from the three percent pace of 2011.   Here’s the rub; 9,900 of the 11,700 rise came in the Leisure and Hospitality sector and represents a twelve month gain of about 8 percent for that sector.  Thus, the Leisure sector accounted for 85 percent of private job expansion over the last twelve months.

What is more questionable is the fact that the arts, recreation and entertainment sub category within the Leisure sector accounted for 5,800 of the net jobs increase. Bear in mind that the arts, recreation and entertainment sub group (26,000 jobs) made up roughly 21 percent of the Leisure sector employment in June 2013 but accounted for 60 percent of total sector growth.   When a sub group that has employment of significant measurable size grows 20 percent or more in one year, there ought to be a reasonable explanation.  This sub group in the Pittsburgh region has been growing far above the pace posted by the arts and recreation category nationally for some years now—no reasonable explanation is offered.

Since the local jobs data does not report specifically on the arts and recreation sub category—it has to be calculated by subtracting the accommodation and food services numbers from the total—and the specific industries within the sub category are never mentioned, we must simply take it on faith that the jobs data are accurate.  They might be, but the Labor Department owes some kind of explanation as to how this sub category within Leisure and Hospitality is exploding in its employment count.

The other problem is the seasonable adjustment factors for the household survey are being changed substantially and they do not give adjusted estimates that track appropriately with the unadjusted numbers. Again, the Labor Department needs to offer some guidance as to why that is happening.

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Allegheny Institute
Allegheny Institute

The Allegheny Institute is a non-profit research and education organization. Our mission is to defend the interests of taxpayers, citizens and businesses against an increasingly burdensome and intrusive government.

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