Regional employment improves slowly
Atlanta Fed President Dennis Lockhart noted in a May 15 speech in Atlanta that:
"I expect GDP growth for the rest of this year and over the next couple of years to be in the range of 3 to 4 percent annually. I expect growth of consumer and business spending to be sustained, reflecting increased confidence in the durability of the recovery."
He recognized that despite the ongoing recovery, national unemployment remains unacceptably high and only slow improvements are expected:
"Unfortunately, recovery has been too slow so far to reduce unemployment meaningfully. Over the next two years, I expect a gradual decline in unemployment."
The U.S. Bureau of Labor Statistics released April employment data for individual states last week, and the reports for Sixth District states reflect President Lockhart's concern. The District unemployment rate (derived from the sum of the six states' labor forces and the total number of unemployed) decreased to 10 percent in April, down 0.2 percentage points from March. Unfortunately, all District states continue to have unemployment rates higher than the national unemployment rate with the exception of Louisiana. In addition, unemployment rates decreased only in Florida and Georgia, while they increased in a bit in Alabama, Mississippi, and Tennessee. Louisiana's unemployment rate was unchanged in April. Importantly, the labor force total for the region grew at its fastest pace since December 2007, an encouraging sign that those that had given up hope of finding a job have restarted their job searches. The table below shows the change in Sixth District states’ unemployment rates from March to April.
In addition to expecting only slow improvement to unemployment rates, President Lockhart does not see a return to prerecession employment levels any time soon:
"At the gradual pace I'm expecting, it could take up to three years to get employment back to prerecession levels."
Since the region lost more jobs on a percentage basis than the United States as a whole, we can expect that it may take longer for states in the Sixth District to rebound to prerecession levels. The U.S. as a whole saw total employment levels decline 6.3 percent during the recession, while the region saw a drop of 8.5 percent. Total U.S. employment has risen 1.4 percent during the recovery, while the states of the Sixth District have seen total employment bounce back at a slower pace, at 1 percent. The chart below shows total employment in the United States and the total of Sixth District states, indexed to January 2007 = 100.
Looking at April state reports for payroll employment growth, the data are positive, as all six District states logged increases.
While we are headed in the right direction, it will—as President Lockhart said—take years to get to where we were before the recession, both nationally and regionally.
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department, and Sandra Kollen, a senior analyst in the Atlanta Fed’s research department
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