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August 8, 2008
The Texas Workforce Commission (TWC) has recently published first quarter Covered Employment and Wages data (CEW) along with updates to several previous quarters. The CEW data are the basis for benchmarking the payroll employment data. TWC releases re-benchmarked payroll figures once per year, with the next update not scheduled until March 2009. For several years the Dallas Fed has undertaken to estimate more up-to-date payroll employment figures by incorporating CEW data as they are released quarterly by TWC.
Benchmark Results
With the inclusion of the new CEW information, first quarter 2008 Texas payroll employment growth was revised down from an annualized rate of 2.7 percent to 2 percent. The FRB Dallas benchmarking program has resulted in an average upward revision of 1 percentage point over the past 14 quarters. The only previous downward revision during that time was for third quarter 2007, although even in that quarter, private employment growth was revised up, if only slightly.
Texas employment growth in earlier quarters was little revised. The FRB Dallas estimate of total Texas payroll employment growth for 2007 is 3.2 percent. Given that the fourth quarter CEW data have undergone one revision, it is unlikely that this figure will be much revised in the future. The corresponding TWC figure is only 2.5 percent, which, as we have pointed out, has not yet incorporated the latest CEW data.
Chart 1
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Recent Employment Performance
Texas payroll employment grew an annualized 2.5 percent during the second quarter of 2008. This compares to a decline of 0.5 percent in U.S. employment over the same period . Recalling that the Texas figure is still subject to benchmark revision, it is hard to say whether true employment growth over this period is likely to be higher or lower. The long spell of upward revisions has been broken. There is no guarantee that the next revision will also be negative, but the chances of that happening seem to be better. When second quarter 2008 CEW data are published, most likely in November, we will have a better sense of recent Texas employment performance.
—Franklin D. Berger
| 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 most recent 14 quarters for which final results are available (fourth quarter 2004 through first quarter 2008), Dallas Fed adjustments have resulted in an average upward revision from the initial TWC estimates of 1 percentage point. These Dallas Fed adjustments have underestimated final TWC data by an average of 0.1 percentage point.
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