The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.
The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.
Postings are weekly.
The long climb ahead
A colleague of mine here at the Atlanta Fed is an expert rock climber. I'm not talking about scaling some indoor wall, but real rock climbing—Rocky Mountain–type rock climbing. I don't know how she does it. I thought about trying it once several years (and several pounds) ago, but after about three seconds of deep contemplation I chickened out. Probably the smartest decision of my life, seeing how I'm rather clumsy and afraid of heights…
Anyway, maybe it's a stretch to compare my colleague's rock climbing expeditions to what the states of the Sixth District are doing in terms of trying to climb back to where they were with regard to prerecession employment levels. Regardless, it's a useful analogy.
Here's a disturbing fact: Georgia is the only state in the nation that has not seen any recovery in total employment. In other words, only in Georgia is employment still declining—the Peach State has not even begun to climb yet. Here's another troubling detail: Florida has farther to climb to recover the jobs it has lost than any other state in the nation save one. Let me explain.
The first column in the table below shows the percent change in total employment by state from each state's peak employment level before the recession to its trough, or the point at which employment stopped declining. The second column shows the percent change in total employment from the trough to September 2011, the latest month that state-level data are available. As you can see in the chart, Georgia is the only state in the nation that does not have a positive reading in the "trough to present" column, meaning that the current level of employment is at its low point.
The third column simply measures the difference between the two. I call this the "Assuage Gauge"—a positive number means that the current level of total employment has recovered and is above its prerecession level. In other words, the higher the number, the more the employment situation has been alleviated. A state with a negative reading indicates that the employment level is still below its prerecession peak. In looking at the states of the Sixth District, Florida has a very weak reading in its Assuage Gauge. In fact, only Nevada has a poorer reading.
Back to my original analogy: Georgia has not even started its climb, and when Florida looks up at where it needs to go to get back to where it was in terms of total employment, its climb is incredibly steep. Alabama has a long way to go, Mississippi and Tennessee are a bit farther along, and Louisiana is getting close to the summit.
SouthPoint has discussed the Southeast's lagging recovery over the past year, noting in our September 30 post that "the driving force behind the region's economic growth was population gains, which in turn ignited development and, in the case of Florida and Georgia in particular, overbuilding in both residential and commercial space." Let's look a bit more broadly.
Atlanta Fed President Dennis Lockhart has spoken about the nation's lagging employment recovery on several occasions, most recently in Washington, D.C., where he discussed the important role new businesses play in job creation. In late September in Jacksonville, Florida, President Lockhart noted that
"In terms of job creation, we appear to be treading water. Basically, the weak pace of growth in output since the end of the recession has translated to only modest net job creation. Modest gains in the private sector have been partially offset by ongoing losses in the public sector. As a result, there has been little progress in bringing down the high rate of unemployment."
The charts below highlight the divergence between public and private sector employment growth. We use the methodology of "employment momentum," which is a tool to gauge the relative strength of direction of employment. For example, if a data point shows a positive percent change in its short-term measurement (the three-month percent change) and a positive percent change in its longer-term measurement (the year-over-year percent change), we can say that momentum is strong. Data points showing this pattern are in the "Expanding" quadrant. Figures with both short- and long-term negative percent changes are seen as reflecting weak momentum and fall in the "Contracting" quadrant. Those deemed as "Slipping" show a positive long-term percent change, but the short-term measurement has turned negative. "Improving" reflects a negative long-term percent change, but a positive short-term movement.
Each point in the charts represents a state, and the states of the Sixth District are labeled. Two things jump out. First, as President Lockhart noted, public sector employment is much weaker than private sector employment. Only six states fall in the "expanding" quadrant for government employment, and only two states have private sector employment that falls in the "lagging" quadrant. The other is that Georgia not only has lagging government sector employment, but it is only one of two states with lagging private sector employment. Any way you cut it, the employment situation in Georgia and Florida is pretty lousy. The Atlanta Fed's macroblog has investigated the national employment picture for some time. To look more closely at employment trends and other data series for the states in the Sixth District, please see our State Data Digests. We update these on a monthly basis, so check back for updates.
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department
TrackBack URL for this entry:
Listed below are links to blogs that reference The long climb ahead :
- Southeastern Transportation: Tapping the Brakes?
- Southeast Manufacturing Slows in August
- It's Mostly Sunny in Florida
- Auto Manufacturing an Economic Boon for Tennessee
- Southeast Manufacturing Rebounded in June
- Southeast Manufacturing Dips in May
- Assessing the Impact of Oil Price Declines on Louisiana's Economy
- Seeking the Slack
- Middle Tennessee Consumer Confidence on the Rise
- Trials and Tribulations in Transportation
- November 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- Banks and banking
- Beige Book
- Business Cycles
- Commodity Prices
- Consumer Savings
- Data Releases
- Disaster recovery
- Economic conditions
- Economic Growth and Development
- Economic Indicators
- Fiscal Policy
- Gulf Coast
- Health Care
- Holiday Sales
- Labor Markets
- Local Economic Analysis and Research Network (LEARN)
- Monetary Policy
- Natural Disasters
- New Orleans
- Oil Spill
- Real Estate
- Sales Tax