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.
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Not So Fast: Sixth District Payroll Growth Takes a Breather in May
In its monthly Employment Situation report for May 2013, released June 7, the U.S. Bureau of Labor Statistics (BLS) estimated 175,000 new payrolls had been created across the United States. Even though in the report it was announced the unemployment rate ticked up just about 0.1 percentage point to reach 7.6 percent (due in large part to a sizeable 420,000 re-entrants into the labor force), the report was considered a fairly mediocre one that beat consensus expectations by about 10,000 payroll jobs.
Two weeks later, on June 21, we found out much more detail about where these new payrolls were geographically, and what types of jobs were gained or lost in each state, through the BLS's Regional and State Employment and Unemployment Summary. It was a surprise to find out only about 7 percent of the new payrolls created nationally during May showed up in Sixth District states. SouthPoint devotees may recall a much more chipper entry summarizing the regional labor market through April, when net Sixth District aggregate payrolls were averaging about 33,000 net new payrolls per month, but with just 9,600 net new payrolls in our six-state region during the month of May, it appears the District's aggregate labor market rested on its laurels last month, and in fact, Florida—and, to a lesser extent, Georgia—gave back a portion of its gains over the last few months (see the chart).
Florida: Two leaps forward, one step back
Simply because of its labor market's size relative to the rest of the states in the Sixth District, the most obvious culprit for large monthly fluctuations in the Sixth District labor market tends to be Florida (see the table). Despite having some large payroll gains in March and April, Florida had the third-largest decline in payrolls of any state in the nation in May, which weighed down the Sixth District figure heavily for the month, as opposed to the usual hefty boost it's been giving the Sixth District aggregate for the last couple of months. To keep Florida's 6,200 net decline in payrolls in May in perspective, the state tacked on nearly 44,000 net new payroll jobs over the months of March and April.
Florida's construction sector took one big step back in May ( down 7,500 payrolls) after two big steps forward in March and April (combined, an increase of 14,200). Florida's leisure and hospitality industry shrank by 2,400 payrolls in May, while a more typical factor behind declining payrolls these days—the government sector—shed 4,000 payroll jobs in Florida last month. Brighter spots in the Sunshine State's labor market last month included professional and business services, which added 5,400 payroll jobs after adding roughly the same amount in April, and real estate, which has tacked on a consistent 1,900 net new payroll jobs in March, April, and May (5,700 for the three months combined).
Georgia also saw a decline in payrolls over the month of May (though notably less sizeable), shedding 700 payroll jobs, while Tennessee and Louisiana led the District in payroll creation, tacking on a net 5,700 and 5,300 payroll jobs, respectively. Job gains in Tennessee were relatively concentrated in retail trade (2,800 payrolls), trade and transportation (2,700 payrolls), professional and business services (2,300 payrolls), and manufacturing (2,200 payrolls). Louisiana's construction sector fared better than Florida's in May, adding 2,100 payrolls, while there were an estimated 1,700 net new education and health payrolls across the state last month. Other sector gains in Louisiana were relatively small but broad-based.
Alabama and Mississippi both clocked in adding just under 3,000 payrolls in May. In Alabama, the leisure and hospitality sector saw the largest increase in payrolls, adding 3,000 in that sector last month, with about 2,400 of those being in accommodation and food-service industries. The professional and business services sector in Alabama added 2,200 payrolls over the month, but education and healthcare saw a net loss of about 2,300 jobs in the state. Mississippi followed employment trends of its two primary neighbors, Alabama and Louisiana, in May; last month, Mississippi, like Alabama, shed education and healthcare payrolls (but to the lesser extent of roughly 1,000 jobs), but as in Louisiana, added construction payrolls (but again, to a lesser extent of 1,200 jobs). Also, an exception in the Sixth District in this report, Mississippi added payrolls to its government sector to the tune of about 1,200 in May.
By Mark Carter, a senior economic analyst in the Atlanta Fed's research department
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