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09/29/2010

Slow recovery for regional labor markets

According to the establishment survey from the U.S. Bureau of Labor Statistics, the Sixth District lost 26,600 jobs in August after adding 16,600 jobs in July (see chart 1). While a large portion of the decline stemmed from government jobs, as temporary census-related jobs are being scaled back, private payrolls also declined over the month. Private payrolls in the District fell 7,800 in August after posting increases over the previous two months, albeit at a slow pace. In June and July, the District added 13,000 and 40,000 private jobs, respectively. For the United States as a whole, 54,000 nonfarm jobs were shed in August, reflecting the end of 114,000 temporary census jobs. The number of temporary census workers on payroll peaked in May at 564,000 and has declined since, leaving 82,000 census workers on payrolls in August.

Chart 1

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The labor market is usually the last part of the economy to recover following economic downturns. To get an idea of how the District labor market is recovering compared to previous recessions, take a look at chart 2, which plots employment growth for the Sixth District going into and out of the past five recessions. Zero marks the official end of recessions, or the economic trough, of each one. In the latest recession, employment in the Sixth District fell much farther than in previous experiences. The labor market has not recovered quite as quickly from the 2007–09 recession compared with the past four recessions. While economic conditions of every recession are different, the recovery in labor markets from this recession seems to be longer and slower and will look like the recovery after the 2001 recession at best. Anecdotes from contacts in our district mirror this gradual recovery, reporting that they remain cautious about hiring and will take their time doing so.

Chart 2

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By Sandra Kollen, a senior economic analyst in the Atlanta Fed's research department

September 29, 2010 in Employment, Labor Markets | Permalink

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