Daniel J. Kinnear, Business Information Specialist
March 26, 2018
The benchmarked employment data produced quarterly by EBRC (available exclusively for Forecasting Project sponsors) anticipated that Arizona’s job growth in 2017 would be revised upward significantly. The official revisions confirm that job growth in Arizona accelerated faster than previously suggested by the preliminary data in both 2016 and 2017.
Every year in March, the Bureau of Labor Statistics (BLS) and the Arizona Office of Economic Opportunity release annual revisions of the Current Employment Statistics (CES). These revisions incorporate the Quarterly Census of Wages and Employment (QCEW) data through September of the previous year. While the CES produces high-frequency survey data of employers around the state, the QCEW dataset provides a higher-quality measurement of employment activity on a delayed quarterly basis. These two datasets are “benchmarked,” or reconciled, once per year so that the CES estimates more closely match the overall trend in the QCEW data. The Forecasting Project takes advantage of the quarterly release of the QCEW data to anticipate these official revisions by producing an internal benchmarked employment dataset. While EBRC’s benchmarked employment data predicted a significant upward revision would occur, the official results came in even stronger than expected.
The revised estimates for 2017 show that Arizona employment averaged 2,772,500 for the year – a 2.4% increase over 2016, a net gain of 63,900 jobs (Exhibits 1 and 2). This represented faster job growth in 2017 than suggested by the preliminary estimate of 1.7%. Employment growth in 2016 was also revised upward from 2.6% to 2.7%, an increase in net job gains from 68,100 to 72,100.
Exhibit 1: Arizona Percentage Job Growth
Exhibit 2: Arizona Net Job Growth
The revisions by industry (Exhibit 3 show that the upward revisions in employment were broadly distributed across most industries, with only one industry (leisure and hospitality) revised downward. Educational and health services produced the highest number of net job gains in 2017 – this sector added 13,800 jobs, an annual growth rate of 3.3%. The construction industry added 10,000 jobs in 2017, more than double the preliminary estimate of 4,160. This dramatic upward revision resulted in an employment growth rate of 7.4%, the highest across all industries by a wide margin. Additionally, the revised employment data wiped out job losses suggested by the preliminary data in natural resources and mining, other services, and information, leaving those industries with flat job growth in 2017. As predicted by the Forecasting Project benchmarked employment data, the official revisions show that job growth in Arizona accelerated significantly faster than the preliminary data suggested across almost all industries – an encouraging development for the state’s economy.
Exhibit 3: Net Job Gains by Industry
