Kansas Relative Employment Performance since 2005

Not terribly great, especially since 2013.

Some people think that Kansas would look good, if only one used a different normalization than the 2011M01 date I used in this post.

I think it’s downright dodgy for Menzie Chinn to normalize in 2011, when clearly if you want to compare those four states (Kansas, Wisconsin, Minnesota, California) you must immediately accept that Kansas is exceptional amongst the four in that it was the least hit by job losses during the 2009 recession (by a significant margin). You could normalize based on 2005 and get a completely different picture, it’s quite a deceptive presentation.

Here is private nonfarm payroll employment, normalized to 2011M01.

Figure 1: Log private nonfarm payroll employment in Minnesota (blue), Wisconsin (red), Kansas (green), California (teal), US (black), all 2005M01=0. NBER defined recession dates shaded gray. Source: BLS, NBER, author’s calculations.

And here is private nonfarm payroll employment, normalized to 2005M01.

Figure 2: Log private nonfarm payroll employment in Minnesota (blue), Wisconsin (red), Kansas (green), California (teal), US (black), all 2005M01=0. NBER defined recession dates shaded gray. Source: BLS, NBER, author’s calculations.

Doesn’t look particularly impressive to me. (By the way, KS peak to trough decline in employment is comparable to MN peak to trough decline.) Maybe if one normalized on national peak as defined by NBER…

Figure 3: Log private nonfarm payroll employment in Minnesota (blue), Wisconsin (red), Kansas (green), California (teal), US (black), all 2007M12=0. NBER defined recession dates shaded gray. Source: BLS, NBER, author’s calculations.

Still looks like pretty poor performance, post-2011M01.

I fully expect another attempt to prettify the Kansas economic outlook. Like an appeal to unemployment rates, despite the fact that there are fixed effects in unemployment rates. By the standard of 1976-2010, Kansas is underperforming relative to history (see here).

In other news, Moody’s has dropped the credit outlook for Kansas government debt to negative.