Colorado’s natural-resources sector went from a hiring goat to hero Wednesday after quarterly revisions converted what was considered the biggest percentage drag on employment in the state into the biggest booster.
“The official series has been underestimating employment and employment growth in mining and logging,” a category that includes the oil and gas industry, said Ryan Gedney, a senior economist with the Colorado Department of Labor and Employment.
Employment in the sector, in which about eight of 10 jobs are linked to oil and gas, is now estimated at 25,400 rather than the 21,500 initially reported earlier this month, according to revisions based on second-quarter unemployment insurance reports released Wednesday. The revisions for the second quarter were carried through estimates for October, the most recent monthly report.
A 3.2 percent year-over-year decline, the largest drop of any sector in Colorado, is now an 11.4 percent increase, the largest increase of any sector.
That Colorado would be still losing those jobs this year despite a jump in rigs actively drilling for oil and gas from 19 a year ago to 34 last month was an anomaly.
A rebound in oil and gas prices has helped make natural resources the top sector for percentage job gains the past year in 20 states, according to a report Tuesday from the U.S. Bureau of Labor Statistics.
North Dakota was the leader, with a 23.4 percent jump in natural-resources employment, followed by Texas, up 16.9 percent, and Wyoming, up 12.2 percent, on a seasonally unadjusted basis.
Construction was another sector in Colorado in which initial monthly payroll counts undershot the mark. Revisions put construction employment at 167,000 in October versus the 158,700 first estimated. The annual pace of construction hiring is now estimated at 6.7 percent versus 2.3 percent, a rate that makes more sense given all the cranes visible on Denver’s skyline.
Overall, state payrolls through October are 9,500 higher than first estimated from a monthly survey of employers and employment. Employment in the state is estimated to be growing 2 percent in October year-over-year versus the 1.4 percent pace initially reported.
The revisions also help explain why Colorado’s unemployment rate, which is based on a separate household survey, reached a record low of 2.3 percent last spring. Hiring wasn’t nearly as tepid as monthly reports were suggesting during the second quarter.
Although most sectors saw an increase in employment, some were revised lower. Revisions lowered employment counts in trade, transportation and utilities by 8,100 jobs through October, information by 1,600 jobs and other services by 2,200.
That catch-all sector, which includes industries as diverse as laundromats, equipment repair shops and nonprofits, went from the state’s top performer to the worst performer for percentage of job gains.
So how did the employment numbers get so out of whack? Monthly employment reports are based on a survey of employers and adjusted statistically.
Every quarter, employers must list the number of workers on their payroll when they pay unemployment insurance premiums, giving a truer tally. Nationally, the two series are reconciled in March, but Gedney said Colorado is one of only two states, along with Washington, that squares up the numbers quarterly.
“It is not an official BLS product. We feel that updating this four times a year is best practice,” he said.
Broomfield economist Gary Horvath said big discrepancies between the monthly reports and the quarterly revisions in the past have sometimes been traced to the sample of companies that federal officials survey. Also, when sectors go through a big wave of hiring or reductions, the official counts can take longer to catch up.
“When you get an industry with a period of strong growth or decline, it can mess with the numbers,” he said. “When the numbers are in doubt, you have to look at the activity on the street.”
That activity appears to be showing a Colorado economy running stronger than what the officials stats are capturing.