Benchmark Revision of Non-Farm Payrolls
by James Jones and Peter Fuleky, UHERO, April 7, 2013
The annual benchmark revision of employment statistics from the US Bureau of Labor Statistics (BLS) indicated that 4,000 more jobs were created in Hawaii over the past two years than previously thought. The benchmarking process is an annual revision that incorporates unemployment insurance tax records to supplement preliminary payroll estimates, which are based on employer surveys. The latest official figures show that the number of non-farm payrolls in Hawaii grew by 1.2% in 2011 and 1.9% in 2012; roughly 18,400 new jobs were created since 2010. While the state still has a way to go to recover all of the 38,000 jobs lost during The Great Recession, the positive revision indicates that the local economy has made more progress on the road to recovery than previously thought.
Geographically the positive revisions were concentrated entirely in Honolulu County. The benchmarked figures show that the number of non-farm payrolls in Honolulu County grew by 1.3% in 2011 and 1.8% last year; creating 13,600 new jobs and clawing back almost two-thirds of the jobs lost since 2007. In contrast, in the state’s three Neighbor Island counties the benchmarking process cut payroll estimates. After losing almost 17,000 jobs during the Great Recession and limited job growth of less than 1% in 2011, preliminary figures indicated that job creation was beginning to pick up in earnest on the Neighbor Islands last year. But the benchmarked figures cut estimates for job growth last year from 3.1% to 2.3%. While the revised figures still show positive job growth across the Neighbor Islands, given the severity of the economic downturn any indication of a slower recovery is certainly disappointing.
Some of the state’s key industries underwent significant revisions. Preliminary figures indicated that the local construction sector continued to shed jobs through 2011 and grew by less than 1% last year, but the revised figures show that construction jobs actually stabilized in 2011 and grew by 2.4% last year. For an in-depth analysis on construction conditions in the state and the outlook going forward see UHERO’s latest report Hawaii Construction Forecast: Construction Upswing Picks Up Speed. Public sector job counts also saw a surprising upward revision.
Locally and across the nation public sector layoffs have put a damper on the recovery but the latest figures indicate that state and local government agencies in Hawaii added more than 1,100 jobs last year, up from 200 new jobs indicated in preliminary estimates. While almost all sectors had job counts revised up, a notable exception is the leisure and hospitality sector where preliminary job counts were actually slashed during the benchmarking process. Preliminary figures indicated that the sector added almost 8,500 jobs since 2010, but revised figures indicate the number of new jobs is closer to 6,800. Despite the negative revision, the leisure and hospitality industry added more jobs over the past two years than any other sector and accounted for more than one-third of all of the new jobs created in the state.