Gary Keith is like most of us. He looks around and sees the construction, the new downtown apartments in renovated buildings, the restaurants opening up.
His gut tells him the Buffalo Niagara economy is on an upswing.
But Keith also is M&T Bank’s regional economist in Buffalo. Like any good economist, Keith likes to have statistics that can back this feeling up.
The trouble is, the most recent economic data doesn’t match what Keith and most of the rest of us are seeing.
And that has Keith feeling frustrated.
“I’m a data guy, and I just scratch my head,” Keith said.
What has Keith scratching his head are the region’s job numbers.
The most timely set of numbers, which came out earlier this month and track the job market through May, say hiring is lukewarm, at best. Those numbers, which come from the state Labor Department and the U.S. Bureau of Labor Statistics, say we’re adding jobs this year at the same tepid pace that we did in 2012 ... and 2013 ... and 2014 ... and 2015.
But there’s another set of numbers, which are based on more extensive Census data, and those tell a much different story.
They say job growth in the Buffalo Niagara region accelerated last year, steadily gaining steam as the year went on. According to those numbers, job growth has picked up during each of the last two years, with hiring during 2015 running at more than twice the pace it did during 2013.
Those numbers are based on a bigger and better statistical sample, so Keith and other economists say they’re probably more accurate.
Their big drawback: They’re not as timely as the other numbers, running about six months behind. So those numbers only go through December, which leaves a big void for the first half of this year, especially when you consider that the more timely set of data seems to be off.
“I don’t have much to work with here,” Keith said. “The real-time outlook that we have is pretty cloudy.”
And that’s a problem. The employment numbers are one of the most important pieces of economic data that’s available, not only because how many jobs there are is a huge part of the economy, but also because it’s one of the few local statistics available on a timely basis.
So we’re forced to make do, trying to reconcile two sets of numbers telling two very different stories.
One set says the region has added just 3,600 jobs since May 2015 – an annualized growth rate of 0.6 percent that is just a third of the nationwide pace for job creation. Those numbers even say the region lost about 700 jobs during December – a finding that drew widespread guffaws from economists.
The other set, which came out earlier this month, says that December job loss didn’t happen. In fact, it says job growth was a fairly robust 1.2 percent during December, with the region adding almost 6,600 jobs over the course of 2015. But they don’t shed any light on what’s been happening this year.
That forces economists to guess – and trust their gut instincts – when they try to figure out what the job market is doing right now.
John Slenker, the labor department’s regional economist, thinks the monthly job numbers are understating the pace of local hiring, just as they overstated it last year when those figures said job growth was running at its fastest pace in a quarter century.
Those monthly numbers were revised in early March, using the very same Census data that is the basis for the second, less timely set of job numbers. But that revision only went through the September 2015 numbers, leaving the surprisingly weak fourth-quarter data in place until those figures – and everything that has come out since then – are revised in March 2017.
Slenker expected the Census data to show that the fourth quarter was much stronger than the initial data indicated, and that’s exactly what happened. His guess is that job growth this year is noticeably stronger than the most-current numbers suggest. Instead of job growth running around 0.6 percent this year, he thinks it’s probably closer to 1 percent.
“December should have been much stronger than it was. That leads into January,” Slenker said. “So for that reason, I think the numbers for this year are underestimated.”
Keith says his gut also says to trust the Census numbers – and their higher year-end growth rate – with the expectation that the trend has continued into this year.
Buffalo’s not alone, either. The numbers show the same disparity in Albany, Syracuse and Rochester – and in each of those metro areas, the May data says that they’ve lost jobs over the past year.
In that statistical environment, the Buffalo Niagara region’s 0.6 percent job growth looks good, even if it is understated.
“I’m a lot more confident now,” Keith said. “The story about Buffalo being in a better place than we’ve been is still in place.”