ANN ARBOR—Michigan’s economy is actually doing better than most people think, says a University of Michigan economist.

Instead of lagging behind the national average in job creation from the first quarter of last year to the first quarter of 2013, Michigan exceeded U.S. growth and added twice as many jobs during that time as has been widely reported.

According to Don Grimes of the U-M Institute for Research on Labor, Employment and the Economy, it depends on which set of data from the Bureau of Labor Statistics is used to estimate job growth.

The BLS releases two different data series for the nation, states and metro areas. The Current Employment Statistics data is based on a survey sample of several hundred thousand businesses and government agencies, while the Quarterly Census of Employment and Wages data—released just last week—is based on administrative records of employers’ tax payments for unemployment insurance for their workers.

Grimes says the two series are supposed to generate similar counts of wage and salary employees and nearly identical counts of the change in employment, but for the past few years in Michigan they haven’t. The QCEW is based on an actual count of employees and is, therefore, more reliable. In fact, the CES is benchmarked to the QCEW series every winter, so the BLS also regards it as more accurate.

“The CES data is eventually revised to correct this underestimate, but in the meantime the misleading ‘story’ of how the Michigan economy is performing, based on the CES data, keeps getting reported,” Grimes said. “The job change number gets a lot of attention when the national data is released on the first Friday of every month, and the state and local data later each month.

“But for several years, the CES has been substantially underestimating employment growth in the state of Michigan and some other states.”

According to CES data, Michigan added 42,867 jobs (1.1 percent job growth) from the first quarter of 2012 to the first quarter of this year—0.5 percentage points behind the U.S. growth rate of 1.6 percent during that time. But the more accurate QCEW data shows that Michigan added 85,245 jobs (2.2 percent job growth) over this period—0.5 percentage points higher than the nation’s QCEW-measured job growth (which was 0.1 percent higher than what the CES showed).

“I think this is really important, both because it calls into question the accuracy of some ‘official’ data and because the underestimation of employment growth encourages greater pessimism by the state’s citizens than is warranted,” Grimes said.

The underestimate in Michigan is most noticeable in the construction, business and professional services, and leisure and hospitality industries, Grimes said. The CES data appears to be accurate in measuring the growth of employment in manufacturing and in the private education and health services industries.