Not Bad, Not Great: A Labor Market Update
The first Friday of every month, the U.S. Bureau of Labor Statistics (BLS) reports on the previous month's hiring activity. (July's report surprised economists to the upside: while a consensus expected 100,000 new jobs, the BLS initially reported the economy added 163,000 payrolls.) Generally, two weeks after the national report is released, we find out geographically where these jobs were created and what kinds of jobs were added in the BLS's regional and state employment and unemployment news release.
Last Friday, in the regional and state employment release for July, we found out that last month three Sixth District states added payroll jobs, while three gave up payrolls. While, on net, the District added 9,600 jobs over the month, the fact that three states added payrolls while three more gave them up made me wonder: how evenly are Sixth District labor markets recovering? To answer that, one must compare recent progress with how far each state dropped in employment over the course of the recession.
Each line on the chart below tells a story. Employment levels peaked for the nation and in most states in December 2007, the month before the recession began. For this reason, we indexed all Sixth District states' employment levels to that month for even comparison. We can see that Louisiana is the only state that has “recovered” and reached the employment level it was at in December 2007, while the other District states seem to lag behind dramatically. Florida seems to be a downside outlier, giving up over 10 percent of its workforce from the peak in December 2007 to the summer of 2010.
While comparing labor market recoveries in Louisiana and Florida with those of other District states is statistically sound using this metric, it's helpful to understand the economic context of both states upon entering the recession to see why they're outliers:
- On a chart showing Louisiana's level of employment, handily accessed through the
St. Louis Fed's FRED data application, one can easily guess
where and when Hurricane Katrina might have struck. In August of 2005, 1.95 million people had nonfarm payroll jobs in the state; in October of the same year, just three months
later, there were 1.77 million. In those three months' time, the hurricane took the state's employment level lower than the economic recession that would then follow—hence why,
on the chart below, Louisiana starts off 2006 at the lowest percentage of its peak compared with other District states. (The recession's toll on Louisiana's labor market was worst
in February 2010, when there were roughly 1.87 million total nonfarm payrolls in the state.)
- On the downside, Florida, as we all know, was and is one of the hardest-hit areas of the nation's housing boom and subsequent bust. Construction employment peaked in Florida in June
2006 with 691,000 payrolls; as of July 2012, roughly 309,000 of those payrolls remain. (In fact, Florida's overall net job loss in July was partially fueled by 600 net fewer
construction jobs from June to July, indicating a continuing trend.)
When construction employment is excluded from Florida's labor market, the state begins to look much more like the other District states (see the southeastern employment chart above).
Keep an eye on SouthPoint for the next regional labor-market update, which will reflect August data. The next release from the BLS is scheduled for September 21 at 10 a.m.
By Mark Carter, a senior economic analyst in the Atlanta Fed's research department
TrackBack URL for this entry:
Listed below are links to blogs that reference Not Bad, Not Great: A Labor Market Update: