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February 5, 2009
The Texas Workforce Commission (TWC) recently published third quarter 2008 Covered Employment and Wages data (CEW) along with updates to the first and second quarters. The CEW data are the basis for benchmarking the payroll employment data. TWC releases rebenchmarked payroll figures once per year; the next update is scheduled for March 2009. For several years the Dallas Fed has estimated more up-to-date payroll employment figures by incorporating CEW data as they are released quarterly by TWC.
Benchmark Result
With the inclusion of the new CEW information, third quarter 2008 Texas payroll employment growth was revised down from an annual rate of 1.5 percent to –0.9 percent. This marks the first decline in quarterly Texas employment since the second quarter of 2003. The FRB Dallas benchmarking program produced an average upward revision of 1.1 percentage points over the 14 quarters from third quarter 2004 through fourth quarter 2007. Since then, we have seen three consecutive downward revisions. First quarter 2008 growth was revised down from 2.7 percent to 1.9 percent. Second quarter growth was revised down from 2.3 percent to 1 percent. Finally, third quarter was revised down from 1.5 percent to –0.9 percent. The magnitude of these consecutive downward revisions escalated from –0.8 to –1.3 to –2.4 percentage points.
The FRB Dallas estimate of total Texas payroll employment growth for 2007 is 3.3 percent. The corresponding TWC figure is 2.5 percent, which, as we pointed out above, has not yet incorporated the latest CEW data.
2008 growth stands at 0.4 percent. The fourth quarter has not yet been benchmarked. It would take a downward revision to fourth quarter employment growth of only around one percentage point to put employment growth for the year into negative territory.
Recent Employment Performance
Initial estimates indicate Texas payroll employment declined at an annual rate of 0.4 percent during the fourth quarter of 2008. This compares with a decline in U.S. employment over the same period of 4.4 percent. Based on the recent revision pattern, it is likely that a downward revision for fourth quarter is forthcoming. When fourth quarter 2008 CEW data are published in late May or early June, we will have a better sense of recent Texas employment performance and will have a more precise estimate regarding whether employment increased or decreased in 2008.
—Franklin D. Berger
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| About FRB Dallas-Adjusted
Employment Data CEW
data are published on a quarterly basis.
The Dallas Fed uses this new information
to estimate the TWC final series as soon
as these data are published. The TWC revises
its payroll employment estimates once per
year, with the release of January data in
March.
FRB Dallas-adjusted employment has been very useful in anticipating TWC’s final revisions. Over the 17 quarters for which early benchmark results are available (fourth quarter 2003 through third quarter 2008), Dallas Fed adjustments have resulted in an average upward revision from the initial TWC growth estimates of 0.7 percentage points. Over the period for which final TWC data are available (fourth quarter 2003 through fourth quarter 2006) our Dallas Fed adjustments have underestimated final TWC growth rates by an average of 0.2 percentage points.
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