Tracking Slow, Painful Progress
The region has clearly made progress in reducing the number of unemployed. In January of 2012, the six states in the Sixth Federal Reserve District had a combined total of 2,351,000 unemployed persons and an aggregated unemployment rate of 10.5 percent. By April 2013, the total number unemployed had declined to 1,731,000 and the region’s unemployment rate had fallen to 7.5 percent.
Here’s another way to look at the unemployment issue: Before unemployment began to increase in 2007, the region had a total of 904,000 unemployed. As noted above, in April more than 1.7 million people were still out of work, meaning that 872,500 more people are unemployed now than there were before the recession.
Even if we believe that labor markets were abnormally tight before the recession and that we shouldn’t use the 2005–06 period as a benchmark for what “normal” levels of unemployment would be in an economy exhibiting healthy, sustainable growth rates, a look at unemployment rates since 1990 shows that the current unemployment is still relatively high. From 1990 through 2006, the region’s aggregated average unemployment rate was 5.4 percent. That level is a bit higher than the low of 4 percent reached in early 2007 but still above the latest reading of 7.5 percent. A look at individual states shows that, for most areas in the region, unemployment remains high.
So while unemployment rates have come down and the number of unemployed may not be as high as it was a few years ago, the region is still suffering from higher-than-average unemployment. Progress has been real, but there is still a lot of pain out there.
To keep up to date with the latest on labor market developments, please see the Atlanta Fed’s Center for Human Capital Studies, which is home to several unique tools to track developments in national and regional employment trends. These tools include the Jobs Calculator, which calculates the net employment change needed to achieve a target unemployment rate after a specified number of months. The user can adjust the target unemployment rate, the number of months, and the assumed labor force growth. We have also recently added the Labor Market Spider Chart, a great tool designed to allow real-time tracking or monitoring of broad labor market developments by comparing current conditions with those in the fourth quarters of 2007 (the prerecession peak) and 2009 (the postrecession trough in employment). Finally, see our Human Capital Compendium, which is a repository of research published since 2008 by the Federal Reserve Board of Governors and all 12 Reserve Banks on topics related to employment, unemployment, and workforce development.
By Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department
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