Last updated on November 19th, 2021 at 12:46 pm
Wisconsin’s unemployment rate dropped to 3.2% in October, a two-tenth decline from September’s revised rate of 3.4%.
The state’s unemployment rate had been stuck at 3.9% for six straight months, including the initial estimates for September. However, the September rate was revised down to 3.4% as part of a revision to data by the U.S. Bureau of Labor Statistics.
The BLS uses surveys and models to estimate the unemployment rates for states and metro areas, a process made more difficult by the dramatic swings and unprecedented changes brought on by the COVID-19 pandemic. Since the models were not built to account for an event like the pandemic, BLS has been monitoring its data for outliers and implementing model changes where appropriate.
A change made in January because of an outlier in input data from the Detroit metro area created distortions in the unemployment and labor market data in Michigan, Illinois, Indiana, Ohio and Wisconsin.
The result is that September’s revised data and October’s preliminary data are not directly comparable to data from earlier this year. Scott Hodek, section chief for the Wisconsin Department of Workforce Development Office of Economic Advisors, said it is reasonable to think other months could see a similar downward shift in the unemployment rate, but it is also too early to be certain.
“We would be speculating at this point,” he said.
The BLS plans to address revisions to earlier months as part of its annual benchmarking process, which will be released in March 2022.
Data issues aside, Wisconsin’s falling unemployment rate is not entirely good news. Total employment in the state was up 3,200 and unemployment was down by 4,700, but the overall labor force lost 1,500 people.
As a result, the state’s labor force participation rate fell a tenth of a percent to 66.4%.
Compared to October 2020, which pre-dates the issue in the BLS model, the state’s labor market is in better shape. Wisconsin’s unemployment rate has dropped 1.6 percentage points and labor force participation climbed 0.9 points. There are 54,000 more people in the state’s workforce than at this time last year.
Jobs data, which comes from a different survey than the unemployment rate, also had some good news in October.
Wisconsin added 2,000 private sector jobs compared to September’s revised data.
Most of those job gains were driven by the leisure and hospitality sector, which added 7,800 jobs in October, including 4,800 in accommodation and food service and 3,000 in arts, entertainment and recreation.
The education and health service sector, on the other hand, shed 4,400 jobs. Most of those losses were accounted for by the 3,700 job loss in the health care and social assistance category.