New Mexico's job loss numbers don't add up

A recent report from New Mexico's Workforce Solutions Department says the state ranked last in nonfarm job growth between April of last year and April of this year.

But don't hold your breath over numbers.

"They're probably wrong," Jeff Mitchell, a senior economist with the Bureau of Business & Economic Research (BBER) at the University of New Mexico, tells SFR. "It could be a sampling error."

The Workforce Department numbers show that between April of 2010 and April 2011, New Mexico nonfarm employment dropped 0.3 percent, with the largest losses in construction, information and personal and business services.

But the key to the decline, Mitchell says, is the Workforce Department reporting a 6,000 job loss between last September and October in the professional business and service sector. "In that one month you see about 8 percent of jobs lobbed off that one industry," Mitchell says.

The funny thing isn't that 6,000 is an unlikely monthly labor shift for a state with a total working population of roughly 800,000. It's that the state's unemployment rate between September and October of 2010 stayed at 8.6 percent, according to the U.S. Bureau of Labor Statistics.

What's more, the state's unemployment rate dropped from 8.7 percent in January to 7.6 percent in April. "During this time we were supposedly lagging, our unemployment was falling," Mitchell says.

The Workforce Solutions Department didn't return phone calls from SFR by press time.

The report is voluntary. Bigger states use bigger samples and smaller states use smaller samples, Mitchell says. Smaller samples are less representative and have greater margins of error, he adds. Since New Mexico is small in terms of population, its sample size for the report was probably tiny compared to other states.

The state releases a similar quarterly report that's based on actual counts and is more reliable, Mitchell says, but the next one won't come out until March.

Mitchell acknowledges what he calls the geeky points of proper sampling, but he argues that the Workforce Solutions numbers have an impact in how the state is viewed and run.

BBER estimates New Mexico's employment growth was still in the lower half of the country, but nowhere near as bad as the Workforce Solutions' numbers.

Santa Fe Reporter