The jobs data that Colorado rolled out earlier in March should be based on official information but is still just a guess, according to the U.S. Bureau of Labor Statistics.
Colorado’s labor department tried to keep the incomplete numbers gathered from companies about jobs and wages quiet even as the BLS made note of the unreliable data, which is used at both federal and state levels to get a clear picture of how many jobs have been gained or lost.
Colorado’s jobs figures are refined throughout the year using something called the Quarterly Census of Employment and Wages, or QCEW. It’s sourced from unemployment insurance reports and companies across the U.S. are legally required to submit this information. That makes it a far more reliable data set than the initial monthly jobs reports, which are based on voluntary surveys.
The QCEW data is the gold standard when it comes to calculating job growth. But according to the U.S. Bureau of Labor Statistics, which works alongside the states to produce economic data, Colorado’s data “showed unusual movements” starting last July. The numbers were so erratic that they couldn’t be used for the annual benchmarking process for 2023, according to a note on the BLS website. Instead, numbers for the third quarter were extrapolated using data from previous months to fill in the blanks.
“Benchmark revisions for Colorado for March, September, and December 2023 are presented … but should be interpreted with caution,” the BLS said on its website.
The reason for the bad data is because of an overhaul of the state’s unemployment insurance premiums system. Colorado’s labor department didn’t flag the unusual movements or note that some of the data being presented was incomplete when it held a press conference on the annual benchmarking process earlier this month. A spokesperson for Colorado’s labor department didn’t directly answer CPR’s question as to why the data problems were omitted from the discussion.
The numbers from the QCEW back up huge swathes of economic forecasting and analysis. For instance, the U.S. Department of Commerce uses it to calculate personal income, while the Social Security Administration uses the data as a quality check against information submitted by the Internal Revenue Service. It’s a critical component to understanding how the economy is working, for individual states as well as for the federal government.
At this point, Colorado’s labor department can’t say when they’ll be able to collect it accurately. The department spokesperson said recent numbers are still reliable, even though they contain “far more incomplete data than usual that required estimation.”
“In the new reporting system, some employers were reporting employment and wage data in ways that left certain incompleteness,” the spokesperson said in an emailed statement. “We have been working to improve employers’ understanding of the new system in ways that should improve their reporting in upcoming quarters.”
When asked about disclosing the problems with the data, Gov. Jared Polis declined to comment.
Colorado state economist Ryan Gedney said it’s common to see hiccups in data collection when a system is modernized.
“There was always a risk when we were going to launch a new system in the third quarter that something like this could happen,” Gedney said during an interview. “Unfortunately, something did happen … If it's just a quarter, OK, it's a minor blip or series break. You could kind of get over that … But if it extends further, then that’s where it becomes obviously a longer-term issue.”
The problems with Colorado’s data collection could also call the strength of the state’s recent job growth into question. During the March 11 conference call with reporters, Gedney said the annual benchmarking process showed that Colorado added 37,000 more jobs in 2023 than previously reported. That jump pushed Colorado to 11th place compared to other states when it comes to job growth, according to Gedney. Earlier estimates put Colorado in the bottom 15.
But because of the data snafu, information for three months during that period is still an estimate. Gedney said he’s confident in the numbers and the method used to calculate the tally for the months with missing data. He noted that for the months where QCEW data was complete, it showed that earlier estimates were consistently undercounting jobs.
It might be a while before the state answers additional questions from reporters about the jobs report. Gedney is leaving his position this month, which is unrelated to the data issues, and the state is discontinuing its monthly press calls about the state’s unemployment numbers.
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