CT jobs numbers don’t lie, they just confuse

Gov. Dannel P. Malloy trotted out a favorite statistic Monday on the tarmac of Waterbury-Oxford Airport, where he was promoting his administration’s economic development efforts: More than 40,000 jobs have been created in Connecticut since he took office.

“The reality is with the creation of over 40,000 private sector jobs, we’re doing a pretty good job at it,” Malloy said of the economy.

Meanwhile, Tom Foley, one of several Republicans with an eye on the governor’s office, says Connecticut’s workforce has actually shrunk on Malloy’s watch.

Both have a jobs estimate to back them, and their dueling numbers come from the same source: the Connecticut Department of Labor.

Confounding experts at the DOL, labor force estimates based on the department’s two main employment surveys have produced contradictory results for years, enabling Malloy and his opponents to live in parallel worlds.

In Malloy World, the state has slowly been adding jobs since hitting bottom in early 2010. In GOP World, the state is either struggling badly or plunging to the bottom, depending on which Republican gubernatorial contender is giving the tour.

The two estimates are based on separate monthly surveys. One measures non-farm jobs in Connecticut as reported by 6,500 employers, and the other tries to gauge jobs held by Connecticut residents, based on a survey of 1,600 households.

The non-farm numbers say Connecticut has added 68,000 jobs to an employment base of 1.6 million since early 2010, when the size of the labor force hit bottom after the recession, with 44,000 of those jobs created since Malloy took office.

Estimates based on the household survey paint a different picture: 32,600 fewer residents were employed in July than the 1.7 million at the start of the Malloy administration.

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Economists, including those who have a darker view of the state’s economy than Malloy, say the non-farm employer survey cited by the governor is more reliable and less volatile than the household survey cited by Foley, although even those are periodically revised.

“We really have to rely on the total non-farm numbers,” said Don Klepper-Smith, the chief economist of DataCore, who was an economic adviser to Malloy’s Republican predecessor, M. Jodi Rell.

The sample size is larger, and focusing on non-farm jobs allows the state to produce a seasonally adjusted number that economists say gives a better view of job trends.

But the reliability of one survey over another hardly settles the question of Connecticut’s health, either among economists or politicians, nor does it stop candidates from collecting evidence to build a case for voters in 2014, when Malloy is up for re-election.

And, of course, it does nothing to end a practice that many economists deplore: politicians talking about job gains or losses as though any governor, especially one in a small state, deserves complete credit or blame.

“The government does not create jobs. Businesses do. The role of government is to create an environment conducive to business growth,” Klepper-Smith said.

Economists say the jobs data should be viewed as pieces of a never-finished mosaic. They see trends as more valuable than any monthly report.

Some variations in the two labor force surveys, which are conducted in accordance with criteria set by the U.S. Bureau of Labor Statistics, are expected, since they are not measuring precisely the same things.

The non-farm numbers measure jobs in Connecticut, regardless of whether they are held by residents of this state or another. New Yorkers who hold finance jobs in Stamford or Rhode Island residents who commute to Electric Boat in Groton are counted. But the Fairfield County folks who commute to Manhattan are not.

The opposite is true of the estimates from a household survey, which asks only about state residents who are employed, whether it is in Connecticut or across the state line in New York, Massachusetts or Rhode Island.

But Andy Condon, the economics Ph.D. who has overseen the state DOL’s data and research operation for four years after holding a similar job in Vermont, said those differences do not come close to explaining the differences in the results.

Connecticut is not the only state to get contradictory results. Condon said the Bureau of Labor Statistics has been examining the survey and the assumptions of the economic model through which the results are run to develop the estimates.

“We don’t have the answers,” he said.

Condon and his staff are civil service employees, whose jobs are beyond the reach of any governor, but they are aware that their research always will be closely examined for bias, especially during an election cycle in which the economy is seen as the major issue.

They have a defender in Peter Gioia, the economist for the Connecticut Business & Industry Association, who favors the employer survey over the household one, though he thinks the criteria set by Bureau of Labor Statistics rules have degraded both.

“The problem is neither one of them is very good now,” Gioia said. “That’s no fault of the guys at CT DOL, who I would trust a lot more if they were given more leeway by the BLS.”

Foley said the household survey should not be ignored, even if the non-farm numbers are more reliable.

“There is a very strong trend there,” Foley said. “Even if the data isn’t maybe as accurate as the non-farm data, I believe the trend and the trend is down.”

Not all the Republicans attack the validity of the non-farm numbers, preferring to broaden the debate beyond DOL data to other indicators and surveys that portray Connecticut as a difficult business environment, at best.

“I think if you look at all the facts, the evidence is there that our recovery is weak,” said Senate Minority Leader John P. McKinney, R-Fairfield, a candidate for governor. “Our recovery has not done as well as other states. I think that points to the policies of this administration.”

The state has taken a pounding in national and state business surveys, most recently in a CBIA/Blum Shapiro survey that found 80 percent of all Connecticut businesses with a negative view of the state’s business climate.

“The surveys we have right now show conclusively Connecticut having a borderline antagonist attitude toward business,” Klepper-Smith said.

Connecticut saw greater job erosion during the recent recession than the United States as a whole, 7.1 percent versus 6.3 percent. And it has been slower to recover: 57.8 percent of the lost jobs have been replaced versus 76.9 percent for the country.

With average monthly jobs gains of 1,700, Klepper-Smith said the Connecticut jobs recovery will not be complete until early 2016 — more than a year after voters decide if Malloy deserves a second term.