ITHACA, N.Y. — It happens like clockwork every March. Not only do the latest monthly jobs numbers roll out, so do revisions to the previous three years of data. Usually, the way it goes is that the changes to the earliest year are slight, the second year minor, and revisions to the latest year (2017 in this case) are fairly substantial.
This is to be expected; those monthly jobs reports are based on a sampling of employers, and are designed to gauge and give a good idea of the overall jobs picture, but not a truly accurate measurement. For that reason, neither the Ithaca Voice nor the Ithaca Times report them.
However, it is generally reasonable to expect the revised numbers to be fairly accurate. So when they come in and suggest there was virtually no job growth in 2017 – well, now is the time to start being a bit concerned. Making it even stranger was that the initial reports suggested that we were going to see an uptick in job growth this year from, 1 to 1.5%, a thousand jobs. It ended up being only about a hundred.
Looking at the reported job totals from the Federal Bureau of Labor Statistics (BLS), it appears that unlike most years, job growth was pretty weak during much of the year; in fact, from April to August, it suggests there were job losses from 2016 to 2017.
These numbers are able to broken down by market sector, and according to the BLS, the behaviors in most market segments was pretty normal – except for one, medical and educational services, also known as “meds and eds”, the 800-pound gorilla of the Tompkins County job market. Typically, that market shows consistent growth each year. It’s hard to compare month-to-month because of the seasonality of the academic year, but year-over-year usually demonstrates solid if modest job growth.
Except for 2017. Note that the months where BLS said the overall Tompkins County job market experienced job losses, are the same months that the meds and eds sector experienced job losses. That also shows up near the end of 2016, which would have been subject to major revisions as well (they would still have been waiting on responses from many employers when the revisions were carried out in 2017).
So now comes the question of what went down where? Let’s take a look at the major players. In 2017, Cornell added 90 faculty and staff locally (bringing local employment to 9,870), and Ithaca College’s employment count dropped by 11 (to 1,733). In an email, Cayuga Medical Center stated their headcount stayed the same (1,439 for both 2016 and 2017). Checking down the list of major medical and educational employers, none of the big market players had any unusual activities – compared to previous years, Cornell grew a little more and Cayuga Medical Center wasn’t growing dozens of jobs per year as before, but combined, those figures are not all that different from the past several years.
The question was posed to Martha Armstrong, the Vice President and Director of Economic Development Planning and resident data maven at Tompkins County Area Development (TCAD). Her thought wasn’t that there were job losses, but rather that a wave of retirements left a lot of shoes to fill, and that takes time.
“Revised BLS numbers should be more dependable than the monthly estimates. I believe we are seeing the effects of the Baby Boom generation now retiring. That means while there is lots of hiring going on, Boomers are off-setting those numbers as they retire. Employers in a number of sectors are having trouble filling those retirement slots, so those vacancies that may take months to fill are bringing the number of jobs down — there are thus many employment opportunities that are not filled jobs,” said Armstrong.
There is some evidence to back that up. Tompkins County has an unusually high number of Baby Boomers in its workforce when compared to similar counties. The older Boomers are starting to retire in large numbers, and this has led to a shrinking of the work force even as the local population has grown. Note that the drop in the work force is not all retirement – some of it is due to the growth commuting from outside the county, because while they work in the county, those individuals aren’t counted as part of the county’s workforce, but are instead counted as part of their home county’s workforce.
So the prevailing argument seems to be that there is still job growth here, but now there’s an uptick in vacancies in the often higher-up roles that seasoned older workers filled and have recently retired from. It’s easy for the pessimists to say this is a lie and everything here is awful and terrible, and for the optimists to cling to this reason, but it’s going to take time to see what’s right.
Here’s one possibility that may provide evidence as to whether job growth is stalling – if in the next several months, Tompkins County is reporting unusually high employment growth, as January and February have, then that likely means 2017 was undercounted, either due to sampling issues or because many vacant jobs were filled over the past year. If the numbers show little if any growth, than it’s likely the market is stalling.
For those looking for a broader picture, the Ithaca Business Index, run by Ithaca College economics professor Elia Kacapyr, looks at not only jobs counts and the labor force, it also looks at real estate sales, help wanted advertising, average weekly hours worked, and retail sales.He uses January 1985 as a baseline, 100. A number of 170 means the economy has grown 70% since January 1985.
Kacapyr isn’t known for sugarcoating how the local economy is doing; you might remember has monthly reports from back in the Ithaca Journal’s better days. Yet according to his analysis, although the 2017 revisions did drop overall economic growth in Tompkins County by 0.5%, the 3.6% economic growth in 2017 was the best since 1999.You can see the impacts of the jobs numbers in the dip in the middle of 2017, but apparently overall economic growth was very good.
So maybe it is just a quirk of the numbers, revisions, retirements or otherwise. At this point, it’s hard to be sure if growth is stalling or not. But it’s something to keep a close eye on as we move through the year.