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Indiana
's economic
picture came into better focus with the recent release of revised
employment figures for the state and its major cities by the
Department of Workforce Development.
The new data tell us that the state economy largely avoided
significant job losses in 2003, with gains in non-manufacturing
industry employment offsetting continued declines in payrolls at the
state's manufacturing facilities.
While there are winners and losers around the state, the
bottom line is that the state economy looks to be in better shape
than we used to think.
For those of you who are relatively new to the business of tracking
state employment data, I can only say "welcome" to the
world of data revision. Those
fabled Watergate reporters, Woodward and Bernstein, would have made
lousy economic journalists. That's
because in the world of economic data, particularly for states and
cities, getting the scoop on everyone else can be a big mistake.
The wiser scribe will treat the data like wine, letting it
age on the shelf before sampling its contents.
Up until last week, the data portrayed the Indiana economy as one
that continued to lose jobs until the late spring of 2003, bottoming
out at a seasonally adjusted level of about 2,850,000 jobs in June,
followed by a mild rebound. Now
the job
data say that the recession-related job declines essentially
stopped in the spring of 2002, or more than twelve months earlier
than
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previously
published. The new data
portray the
Indiana
economy as
essentially treading water from that point forward, with minimal
deviations from a payroll of about 2,900,000.
For
the
Indianapolis
metropolitan area the revisions were even
more pronounced. Instead of
losing almost 45,000 jobs, on a seasonally adjusted basis, over the
twenty-four month period since the summer of 2001, the revised data now
show a much milder, shorter-lived downturn for the
Circle
City
.
With December 2003 seasonally
adjusted employment just shy of 890,000 jobs, the data now say that
Indianapolis is within 5,000 jobs of attaining the payroll levels it
enjoyed before the recession got started.
There are many more stories like those to tell.
The downturn in professional
and business services industries employment that was so pronounced
in
Indianapolis
has largely
been erased in the new job figures.
The boom and bust in the
Elkhart
job totals now shows more restraint in both directions.
The statisticians found enough new jobs
in
Terre Haute
to turn what
was once a 1.6 percent job loss in 2003 into a 1.9 percent gain, while
Fort
Wayne
found itself
going in the opposite direction.
It’s more than a little discomforting to have things change like this.
At the stroke of a pen, so it seems, the stories we've written
and the conclusions we made about at least some
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aspects
of the state economy have to be scrapped.
It’s worse yet for those of us in the forecasting business,
who've carefully calibrated projections of the future to trends that
have now changed.
But
our statistical agencies, to their credit, have always stressed getting
the best estimates of economic activity possible, and if in the process
a few forecasters get indigestion, then so be it.
In the months that have elapsed since the preliminary employment
data were released, new information from tax records, unemployment
claims, and even Census surveys have become available.
The process of reconciling earlier estimates with this new
information is what ends up producing revisions.
And even though this really a story about data, there is also a story
about the economy buried inside. The
pattern of revisions reveals that the services and information
industries, responsible for much of the job creation in recent years,
are also the hardest ones for our statisticians to accurately measure.
Smaller, and more likely to die or be borne in any given year,
employers in these industries can easily be miscounted in surveys used
to obtain the earliest estimates of economic activity.
The new data tell us those companies, and the economy as a whole, are
doing a little better than we used to think.
Patrick M. Barkey
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