Alabama Economy Improving
Alabama's economy could be poised for a modest upswing. During a recent presentation before a group of women entrepreneurs, Lesley McClure, the regional executive at the Atlanta Fed’s Birmingham Branch, said several of the state’s economic indicators were looking up. Notably, Alabama's unemployment rate (seen in the chart below) exceeded 10 percent in 2010 but declined to 6.3 percent by August 2013.
In addition, employment growth was up 2.1 percent from its lowest level during the recession. Importantly, however, total employment in the state declined by 7.7 percent during the recession, so there’s still a lot of ground to make up in the state's labor market. The chart below shows the employment decline Alabama and its major metro areas experienced during the downturn (red bars) and the gains logged during the recovery (blue bars).
Nationally, Lesley reported that labor market conditions have shown some improvement in recent months. Nevertheless, while the national unemployment rate has dropped to 7.3 percent, broad labor market conditions remain mixed. Some indicators are showing progress, but others still signal scant improvement. Atlanta Fed President Dennis Lockhart noted this fact in a speech earlier this week, noting that:
Significant progress has been accomplished just in the past year. The official unemployment rate has fallen from 8.1 percent to 7.3 percent, and payroll employment has grown by about 2.2 million jobs. Payroll job gains for the past 12 months have averaged 184,000 per month, but recently there appears to have been some slowing. The monthly average for the most recent three months is 148,000.
All outreach activities, like Lesley’s speech, include time for discussion and audience questions. On this occasion, Lesley heard several comments about how economic uncertainty was affecting business planning.
"Most of the attendees were small business owners, and they are very concerned about the economic outlook," Lesley said. "It was an important reminder to me of just how fast unforeseen developments can alter a business owner’s view of future prospects. As we make our economic forecasts, it’s important that we do so with this in mind."
By Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department
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