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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.


SouthPoint

07/09/2014


Southeastern States Mind the (Skills) Gap

During the past few years, we have heard from a significant number of regional business contacts about the challenges they experience filling certain positions and concerns about a skills gap facing the Southeast. We heard this from various industries, most often about engineering, construction, and IT jobs. The most recent Southeastern Insights mentions this widespread issue.

This skills shortage situation is not unique to the Southeast. The U.S. Chamber of Commerce Foundation published a state-by-state analysis last month measuring performance in a number of areas that contribute to economic prosperity. Their key conclusion reiterates our contacts’ concerns: that mounting skilled-labor shortages are on the horizon to such an extent that they may soon hinder economic growth. According to the study, the current skills gap dilemma is expected to grow substantially as baby boomers retire.  

Fortunately, there’s a bright side: many states have recognized this situation and have taken steps to address the ostensibly approaching workforce crisis. Many of our contacts from both private and public sectors pointed to joint initiatives created by states and businesses designed to confront and abate the situation; which the U.S. Chamber of Commerce Foundation study says is essential to closing the gaps. Below is a sample, extracted from the study, of some of the efforts Sixth District states have taken:

Alabama

  • In 2013, the state launched a College and Career Ready Task Force charged with identifying ways to better prepare students for the workforce by training them in the skills demanded by growing industries across the state.
  • New and expanding businesses can get workforce development services through the Alabama Industrial Development Training program, which offers services to businesses in need of skilled workers, including preemployment selection and training, leadership development courses, and third-party process improvement assessments.
  • The Alabama Technology Network provides skills training for the manufacturing and high technology workforce. The network connects businesses to the portfolio of training resources and programs provided by the state’s colleges and universities, offering services through regional centers.
  • The Go Build Alabama initiative works to attract talented workers to construction and skilled trades.

Florida

  • Quick Response Training enables new and expanding businesses in need of training to partner with community colleges and other educational institutions in the state to develop and deliver workforce training programs.
  • The Incumbent Worker Training program supports training the existing workforce to enhance and maintain competitiveness.
  • The Career and Professional Education Act guides Florida’s efforts to diversify its economy and develop a more skilled workforce by encouraging collaboration among education, industry, workforce, and economic development stakeholders from across the state.

Georgia

  • In early 2014, the state approved a $44.7 million Science Learning Center on the University of Georgia’s South Campus, providing state-of-the-art facilities aimed at expanding the pipeline for students in science, technology, engineering, and math (often referred to collectively as STEM).
  • Groundbreaking also took place for the Georgia BioScience Training Center, which will support training for companies that choose to locate within the state. Georgia Quick Start, the state’s job training program, will build and operate the state-of-the-art biotech training center.

Louisiana

  • Via the Small Business Employee Training Program, employers can receive up to $3,000 to defray the costs of off-the-shelf training programs for an existing employee.
  • The Louisiana Workforce Commission established Workforce Partners to recognize businesses that have committed to building a “job ready” workforce in the state through support and training.
  • The Strategies to Empower People program provides access to job training, job readiness support, vocational education programs, and a variety of other skills-development services for those receiving government assistance.

Mississippi

  • The Workforce Investment Network consists of more than 60 training and employment centers around the state where employers and job seekers can access services like training, job postings, on-the-job training programs, employment screening services, and job placement assistance.
  • The Mississippi Development Authority also maintains a team of workforce specialists who work with colleges, businesses, workforce development professionals, and other stakeholders to identify resources useful to a particular business. The authority also builds partnerships to pursue needed training services.
  • The University of Mississippi maintains a Professional and Workforce Development program, offering online enrichment courses, certification programs, and outreach services, bringing tailored training programs directly to the employer.

Tennessee

  • The Tennessee Job Skills grant program offers support to technology companies that create “high-skill, high-wage” jobs, reimbursing eligible costs incurred in training development implementation.
  • Entrepreneurs in need of quick turnaround in receiving support for training costs can make use of the state’s Job Based Training Reimbursement program, which provides support within the first 90 days after a new job is created and training starts.
  • The FastTrack Job Training Assistance Program offers employers state support to cover costs for classroom instruction, on-the-job training, training-related travel, training vendors, and development of training materials and programming.

Sixth District states appear to be on a solid track to address skills gap challenges, combining investment in training, education, and business assistance as a long-term workforce development strategy. Time will tell if the investment pays off (we should know sooner rather than later, as boomers are expected to start retiring in droves).

To learn more about states’ efforts, as well as their rankings across five policy areas—talent pipeline, exports and international trade, technology and entrepreneurship, business climate, and infrastructure—check out the U.S. Chamber of Commerce Foundation’s study. There’s also a nifty interactive map you can use to view state rankings and data easily.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed's New Orleans Branch


July 9, 2014 in Alabama, Education, Florida, Georgia, Jobs, Labor Markets, Louisiana, Mississippi, Southeast, Tennessee | Permalink

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04/25/2014


Regional Payroll Growth Rebounds in March

According to last week's regional and state employment report from the U.S. Bureau of Labor Statistics (BLS), Sixth District states added 41,500 payrolls on net in March, and the unemployment rate rose slightly from 6.4 percent to 6.5 percent. This month's release also came with an upward revision to February data that indicated the District added 40,500 jobs that month, about 6,100 payrolls higher than the original February estimate. The table gives a state-by-state breakdown of payroll revisions:

140425_tbl1

The new March data and revised February data appear to be another step in the right direction and perhaps give a somewhat stronger signal that the region's labor markets are gaining some traction after experiencing a few months of slower job growth earlier in the year, a pattern not uncommon over the last few years. Not surprisingly, we've seen a similar pattern in the national data as well (see the chart).


Payroll survey
Once again, Florida was the primary driver of Sixth District payroll growth in March, adding 22,900 payrolls, with Georgia seeing a nice rebound (up 14,600) from February's negative payroll growth (when it was down 5,800). The only state to lose jobs from February to March was Mississippi, which shed 1,400 payrolls. This was the fourth straight month of net payroll losses in that state.

Florida's net payroll gain was the largest one-month addition of any state in the nation, according to the BLS report, and was driven by the leisure and hospitality sector (up 9,500), health care (up 3,300), construction (up 1,900) and manufacturing (up 1,500), and Georgia's net payroll gain—the third-largest of any U.S. state—was driven by retail (up 3,800), the professional and business services sector (up 3,300), and health care (up 3,200).

As for other District states, Tennessee experienced a modest gain in payrolls in March, adding 4,200 jobs. With the largest revision of any Sixth District state, Tennessee's February net payrolls were revised up 3,400 payrolls for a total of 10,300 payrolls. Tennessee's payroll growth over the two-month period of February and March was primarily concentrated in professional and business services (up 6,800 payrolls). Louisiana and Alabama respectively added 900 and 300 jobs in March (see the chart).


Household survey
The aggregate unemployment rate for the Sixth District rose from 6.4 percent to 6.5 percent in March. Half of the six District states experienced an increase in their unemployment rates (Alabama, Florida, and Mississippi), and Louisiana's rate remained unchanged, Georgia's fell from 7.1 percent to 7.0 percent, and Tennessee's fell from 6.9 percent to 6.7 percent (see the table).

140425_tbl2

Want to find out how many jobs it would take to lower the unemployment rate in any of the 50 states? Check out the Atlanta Fed's State Jobs Calculator.

The BLS's next regional and state employment report, which will reflect April data, will be released May 16.

Photo of Teri GaffordBy Teri Gafford, a Regional Economic Information Network director in the Atlanta Fed's Birmingham Branch

 

and

Photo of Mark CarterMark Carter, a senior economic analyst in the Atlanta Fed's research department


April 25, 2014 in Alabama, Employment, Florida, Georgia, Jobs, Labor Markets, Louisiana, Mississippi, Southeast, Tennessee, Unemployment | Permalink

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05/10/2013


Expansion in Regional Manufacturing Continues

Manufacturing contacts in the Southeast region reported continued expansion for the fourth consecutive month, as reflected in the Southeast Purchasing Managers Index (PMI).

The Southeast PMI, produced by the Econometric Center at Kennesaw State University, provides an analysis of the most current market conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The index is based on a survey of representatives from companies in those states regarding trends and activity of new orders, production, employment, supplier delivery time, and finished goods. A reading on this index above 50 represents an expansion in the manufacturing sector, and a reading below 50 indicates a contraction.

This positive trend for manufacturing activity came as a pleasant surprise as the Institute of Supply Management (ISM) Manufacturing Index reported two consecutive drops in the national PMI, suggesting manufacturing growth to have slowed nationally. While Southeast PMI is not a subset of the national index, both measure a mix of similar components by surveying purchasing managers.

The Southeast PMI experienced less than a point increase in April compared with March. Although this increase over the prior period is minimal, the overall index reflected the highest level since May 2012 at 55.5, which is 5.5 points above the of 50-point benchmark. Increases in indices of new orders, production, and employment drove this growth, and each of these components was substantially above its respective measure in the national PMI.

Production experienced the most significant jump of the survey components, with an increase of 5.7 points from March to April, ending at 61.2. Employment jumped 4.1 points during the same period to 57.8. While new orders reflected a much smaller increase of 0.4 points, this minimal increase brings the submeasure to 57.8, well above the expansion benchmark (see the chart).

Of survey participants, 43 percent expect production to be higher in the next three to six months, versus 33 percent for the prior survey period. Although this is not the highest level of optimism reported this year by survey participants, those following the industry welcome these positive sentiments while watching to see if the region will continue to outperform national manufacturing activity.

By Amy Pitts, a senior Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch

May 10, 2013 in Alabama, Employment, Florida, Georgia, Louisiana, Manufacturing, Mississippi, Southeast, Tennessee | Permalink

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04/23/2013


Regional Employment Grew in March, Led by Florida and Georgia

On April 19, the Bureau of Labor Statistics (BLS) released the March regional and state employment and unemployment report. Data in the report show that Sixth District states added a seasonally adjusted 45,500 payrolls in March, and the aggregated regional unemployment rate dropped 0.1 percentage point, to 7.7 percent, with results generally positive across southeastern states (see the chart). The United States as a whole added 88,000 payrolls in March 2013, which means the Sixth District states accounted for a large portion of the national gain.

Notably, February payroll gains for the region were revised down by 11,800, to a new level of 29,800. Nonetheless, the three-month average employment gain for the region remained a healthy 34,500.

Sixth District highlights

  • All states within the Sixth District with the exception of Tennessee added payrolls in March 2013 (see the table). The largest gains were in Florida (32,700, highest in the nation) and Georgia (13,600, third-highest in the nation).
    • Leisure and hospitality (12,500) added the most jobs in Florida, followed by trade, transportation, and utilities (6,600) and construction (5,500).
    • Payroll increases in Georgia came from professional and business services (6,700), trade, transportation, and utilities (4,200) and construction (3,100).
    • Most of the sectors in Tennessee cut jobs over the month, with the leaders being professional and business services (down 3,300) and trade, transportation and utilities (down 2,400).
    • Alabama, Louisiana, and Mississippi experienced only small increases in payrolls.
  • The unemployment rate decreased in Florida (down 0.3 percentage point), Georgia (down 0.2 percentage point), and Mississippi (down 0.2 percentage point). It was unchanged in Alabama and increased in Louisiana (up 0.2 percentage point) and Tennessee (up 0.1 percentage point; see the chart).

Photo of Neil DesaiBy Neil Desai, a senior economic analyst in the Atlanta Fed’s research department

April 23, 2013 in Alabama, Employment, Florida, Georgia, Louisiana, Mississippi, Southeast, Tennessee, Unemployment | Permalink

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03/14/2013


The Sixth District’s Exports to the European Union

The European debt crisis erupted at the end of 2009, after Greece revealed that its government finances were in very bad shape. Stresses in the financial markets, brought on by investor concerns about Greece’s and other European governments’ ability to pay their debts—as well as worries about the banking system—were quickly transmitted to Europe’s economy.

Real gross domestic product in the 27-country European Union (17 countries within that political bloc use the euro as a common currency) began to fall in the fourth quarter of 2011. At the time, a SouthPoint post looked at what the European crisis might mean for the Southeast, given the region’s trade connections with Europe. The conclusion was that Sixth District’s economy was not immune to European problems. Later, in early 2012, a SouthPoint post sifted through the U.S. International Trade Administration’s (ITA) data to determine which District’s states would be more vulnerable to the contracting EU economy.

The recently released ITA state merchandise exports data for 2012 now allow us to quantify how resilient the District’s exporters were to the European crisis last year.

First, let’s put the Southeast data in the national context. In 2012, U.S. merchandise export growth decelerated substantially, to 4 percent from 16 percent in 2011. (Part of the deceleration can be attributed to changes in prices—according to the U.S. Bureau of Labor Statistics, export prices grew 8 percent in 2011 and were virtually unchanged last year.) U.S. exports to the European Union fell 1 percent last year (to $265 billion)—a marked change from the 12 percent growth in 2011. Chemicals (led by pharmaceuticals), transportation equipment (mostly aerospace-related), computer and electronic products, and industrial machinery are the top four U.S. merchandise exports to Europe. Within those categories, growth in exports of pharmaceuticals held up pretty well last year, sales of transportation equipment were mostly unchanged, while U.S. exports to Europe of basic chemicals, semiconductors, and some types of machinery saw notable declines.

As it turns out, the Sixth District did better than the United States as a whole. Exports to the European Union increased 4 percent last year. All the Sixth District states except Mississippi are among the top 20 states that export to the European Union, and only Florida saw its exports to Europe shrink last year. Louisiana’s exports increased 15 percent and Alabama’s rose 8 percent, while sales to Europe were essentially unchanged last year for Georgia, Tennessee and Mississippi.

Looking into the industry mix—which products Europe imports from each state—can help explain the varying export performance across the District. (Another big factor, of course, is the countries within the EU to which states sell their products.)

Let’s start by looking at Louisiana—not only the state where exports to Europe grew at the fastest rate in the District last year, but also the nation’s fifth-largest exporter to the European Union. Louisiana’s biggest export to Europe, as to the rest of the world, is petroleum and coal products. These products accounted for about two-thirds of last year’s growth in the state’s exports to Europe. Most of the rest of that growth came from a 47 percent jump in exports of agricultural products, largely grains and oilseeds.

The industry mix is very different for Alabama, where exports to Europe also grew in 2012. Most of the growth was driven by a 43 percent increase in sales of transportation equipment. For most other industries in Alabama, sales also changed at double-digit rates—both up and down. There was little inching up or edging down; it was more like soaring or plummeting. Chemicals and paper—the state’s two other big exports to Europe—fell by about 25 percent, exports of fabricated metal products rose nearly 60 percent, and Alabama’s sales of wood products to Europe increased more than 80 percent.

Exports of wood products to Europe did even better in Georgia, growing by nearly 500 percent last year to $81 million. As Tom Cunningham—the Atlanta Fed’s regional executive for Georgia—explains, the European Union (and in particular, Germany) is increasingly relying on renewable energy, and there’s been a huge surge in taking Georgia’s readily available pine, pelletizing it, and shipping it off to be burned in Europe. This appears to be a common theme in the South Georgia pine regions. But pellets are still a niche export. Georgia’s total exports to Europe did not grow last year, mostly because the state’s sales of transportation equipment—Georgia’s largest export to the European Union—fell 10 percent.

Growth in exports to Europe also stalled in Tennessee last year. While many of the state’s industries faced a decline in demand from across the Atlantic, total exports to Europe held up because of 15 percent growth in sales of computer and electronic products. Tennessee’s second-largest export to Europe—medical supplies and equipment—also grew, albeit at a much more modest 2 percent.

Similar to Tennessee, but on a much smaller scale, Mississippi’s exports to Europe were boosted by sales of computer equipment and medical supplies and equipment. The aerospace industry also did very well in terms of sales to Europe. However, because of big declines in exports of chemicals and paper, Mississippi’s exports to Europe were essentially the same as in 2011.

While computer and electronics industry fared well in Tennessee and Mississippi, Florida was one of the worst hit in terms of exports to Europe. That industry is the state’s second-largest exporter to Europe, so a 23 percent decline in those exports accounted for a big part of the 7 percent drop in Florida’s total exports to the European Union.

Overall, the Sixth District’s exporters to Europe showed resilience last year, benefiting from the continent’s demand for our energy and agricultural products, certain types of electronic products and medical supplies, as well as a notable increase in prices for some of those products. Still, as European economy stabilizes in 2013, let’s hope for a better year for our exporters.

Photo of Galina AlexeenkoBy Galina Alexeenko, director of the Regional Economic Information Network for the Atlanta Fed’s Nashville Branch

March 14, 2013 in Alabama, Europe, Exports, Georgia, Louisiana, Mississippi, Tennessee | Permalink

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01/05/2011


A look into 2011

January is the time when economic forecasts for the new year percolate throughout the country. The general consensus is that the U.S. economic recovery will remain on track, and the Atlanta Fed's assessment is in line with this consensus. The latest issue of the Bank's quarterly publication EconSouth reviews 2010 and comments on the outlook for 2011. Here are some highlights from the national outlook:

"While the U.S. economy has been expanding for almost a year and a half, and a number of key fundamentals such as business investment and consumer spending have picked up, the recovery has not been strong enough to meaningfully reduce the unemployment rate…

"Lingering joblessness, along with weak income growth, lower housing wealth, and tight credit, are acting as headwinds to the economic recovery…

"The U.S. economy is not all doom and gloom, however. Business investment, a particularly bright spot, grew at a 20 percent annual rate during the first three quarters of the year. This theme of improvement in some areas and ongoing weakness in others illustrates the unevenness of the recovery and heightened uncertainty about future economic prospects."

The story is much the same for the region:

"The Southeast economy in 2010 was marked by strength in some areas and continued weakness in others, with more of the same expected for 2011…

"The ailing real estate market has been a dark cloud over much of the Southeast economy. Florida's real estate market was especially hard hit, but it has also bounced back the strongest. Georgia has seen its share of real estate problems, which have hurt its banking sector. The state has the nation's most bank failures since the crisis began…

"Notwithstanding unprecedented cutbacks in production during the recession, regional vehicle manufacturing recovered in 2010. The region's production outlook is encouraging because of favorable consumer demand for products made here and additional plants that will expand production capacity in the coming year."

The issue also includes information on individual Southeast states:

"Alabama has shown some of the s strongest job growth among southeastern states, regaining in the first three quarters of 2010 about 18 percent of the jobs it lost in 2009. These job gains are reflected in one of the more dramatic drops in unemployment the region has seen since the recession. A fortunate implication of stronger job growth—and the greater spending expected to follow—is that Alabama is projecting the smallest state budget shortfall in the region for the current fiscal year. With the greatest share of pending stimulus projects among southern states, Alabama is poised for those projects to complement its current path of recovery.

"After suffering the hardest fall in real estate in the Southeast, Florida has seen the most dramatic recovery, with total residential sales through most of 2010 at 71 percent of their peak level seen in 2005. Florida is also experiencing its share of the relatively strong performance of manufacturing in 2010. Over the next few years, a drinkware manufacturer and a medical product manufacturer plan expansions there. Another boost to the state's economy in 2010 came from foreign travelers taking advantage of the weak dollar to visit the Sunshine State. On a more somber note, Florida is projecting one of the highest state budget shortfalls among southeastern states in the current fiscal year.

"Georgia holds the dubious honor of being home to the most bank failures in the United States since the banking crisis began and also faces the highest projected budget shortfall of the southeastern states for the current fiscal year. In spite of these financial challenges, farmers in the state have benefited from historically high cotton prices in 2010. In addition, biofuels have become big business in Georgia. The ready availability of privately owned forests has even attracted European manufacturing to the state to create jobs in the biofuel sector. The state has also topped others in the region in terms of tourism growth. Employment in that sector is growing at nearly twice the pace of tourism employment in the next fastest-growing state.

"With residential home sales at only 58 percent of their 2006 peak, Louisiana has the slowest-recovering real estate market among states in the region. On the upside, through the first three quarters of 2010, Louisiana regained the greatest percentage of jobs lost during 2009 (39 percent) and continues to enjoy the lowest unemployment rate among southeastern states. In addition, the announcement of a new facility producing electric and hybrid boats and other recreation vehicles in the state will further boost the region's growing green manufacturing sector. In spite of weak economic conditions, New Orleans once again saw record-breaking attendance at its many festivals and celebrations, including Mardi Gras.

"Mississippi has been slow in regaining jobs. Through the first three quarters of 2010, the state has regained only 7 percent of jobs lost in 2009. Only Georgia recovered a smaller share of lost jobs (less than 1 percent). On the other hand, Mississippi manufacturing is jumping on the green machine with the announcement of a start-up firm planning to manufacture energy-saving electrochromic windows and, over the next few years, the arrival of three biofuel plants.

"Tennessee is looking forward to when Volkswagen's automaking plant in Chattanooga begins production in 2011. The addition of the Leaf electric vehicle from Nissan, whose Smyrna manufacturing plant will be under construction through 2012, will add to the state's history of innovative automaking endeavors. The Volunteer State has enjoyed the fastest growth among southeastern states in personal income in 2010, resulting in one of the smallest projected shortfalls in state budgets in the region for the current fiscal year. The state is also one of the three leaders in the United States for clean technology jobs: 2010 saw the addition of hundreds of solar manufacturing jobs in Tennessee, and increased manufacturing of electric car–charging stations could produce further jobs in coming years. On the downside, flooding in 2010 devastated tourism in Nashville during the traditionally busy summer months."


Photo of Michael ChrisztBy Michael Chriszt
Assistant vice president in the Atlanta Fed research department

January 5, 2011 in Alabama, Florida, Georgia, Louisiana, Mississippi, Outlook, Southeast, Tennessee | Permalink

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06/02/2010


A regional event, for now

In the short term, the Gulf oil spill has largely been a regional economic event. Gulf area aquaculture and tourism businesses have been affected, but for the spill to have national implications, the energy and transportation sectors would have to be interrupted. So far, energy production has not been disrupted and shipping facilities remain open and are operating normally.

Any interruption in oil production, imports or both would have a significant impact on supply. According to the U.S. Department of Energy, Louisiana produces 1.4 million barrels per day of crude oil (2010 average to date), accounting for 27 percent of all U.S. crude oil production. Each day, 6.1 million barrels of crude oil and petroleum products (2010 average to date) enter the country through the Gulf Coast, accounting for 48 percent of all U.S. crude and petroleum product imports.

An extension of the moratorium on new deepwater drilling has not affected prices. However, David Kotok of Cumberland Advisors pointed out in Part 6 of his "Oil Slickonomics" commentary that the longer-term implications of the oil spill hold important price influences.

"Our expectation is that the oil business is about to enter a period of intense scrutiny and regulation worldwide. It will confront higher cost structures and much more inspection and regulation. This will eventually be reflected in higher oil prices."

According to data from the Port of New Orleans, the Mississippi River remains open to maritime traffic, and no ship calls have been canceled because of the spill. Port statistics show that about 500 million tons of cargo passes through the Mississippi each year, and more than 6,000 ocean vessels annually move through New Orleans on the Mississippi River. Any disruption to these facilities would have an impact beyond the port as the flow of goods reaches well beyond Louisiana.

Of course, the longer the spill goes unabated, the greater the chances that the oil production and imports could be affected and port activity could be influenced. The opportunity for the oil slick to spread throughout the Gulf also increases daily, as do the chances that it may move out of the Gulf and up the East Coast. In terms of the geography affected by such events, the regional nature of the Gulf oil spill will become more national in proportion.

By Michael Chriszt, assistant vice president in the Atlanta Fed’s research department

June 2, 2010 in Alabama, Energy, Florida, Local Economic Analysis and Research Network (LEARN), Louisiana, Mississippi, Oil | Permalink

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09/16/2009


Comparing recessions in the Southeast (part two)

Last week we looked at how employment levels in the Sixth District states during the current downturn compared with previous deep recessions. Basically, we are trying to determine if the current downturn is deeper and/or longer than past recessions in terms of its effects on nonfarm payroll employment. In last week's post, we showed that the current decline in nonfarm payroll employment has been deeper than the employment declines in the 74–75 and 81–82 recessions. In addition, the current downturn has lasted longer. This week we will see if that holds true for individual states in the region.

For this analysis, we use data from the U.S. Bureau of Labor Statistics, indexing total employment in each state of the Sixth District to a beginning value of 100. We start the time series six months prior to the peak in regional employment, with zero representing the month when employment levels peaked.

For Alabama, the current downturn in employment is a bit deeper than the 74–75 and 81–82 periods, but the decline appears to be leveling off. Employment took 18 months to return to the previous peak in the 74–75 period, and 26 months in the 81–82 episode. Currently, Alabama is 19 months past peak employment. The state has lost 105,000 jobs since the last peak, meaning that if it does not add that many jobs during the next seven months (which would bring the index level back to 100 in the chart) the current employment downturn will be the longest as well.

091609a

Florida's employment decline is already longer and deeper than previous experiences. The state is 28 months into the downturn whereas previous declines lasted 16 and 18 months, and the index number is well below the 74–75 trough.

091609b

Georgia's current experience looks much like that of the 74–75 downturn. The current index number is a bit below that trough reached in 1975, making the current decline the deepest for Georgia. Whether or not this current episode becomes the longest downturn remains to be seen; it took Georgia 35 months to return to its previous peak in the 1970s episode, and we are in the 19th month of decline for the current period. The state would have to add more than 250,000 jobs during the next 16 months for this current period not to become the longest employment downturn.

091609c

Comparisons for Louisiana are difficult because of the unique nature of its economy. The employment downturn in the 1980s lasted from late 1981 until mid-1993—138 months—in large part because of the structural decline in energy-related employment. Another factor making comparisons tricky for Louisiana is that employment levels in the current period have been supported by ongoing rebuilding efforts and repopulation in the wake of Hurricane Katrina.

091609d

Looking at Mississippi, it's tempting to conclude that the current downturn in employment will not be the deepest or the longest. Employment appears to be stabilizing one-and-a-half years into the decline and at a level above the 74–75 and 81–82 episodes.

091609e

In Tennessee, employment hit the previous low point reached in the 74–75 downturn. However, the uptick seen in the most recent month (July) is tied to a large increase in government employment associated with federal stimulus spending, so we cannot read too much into this as a sign of leveling off. Regardless, the state would still have to add more than 140,000 jobs during the next eight months for the current downturn not to become the longest.

091609f

For most states in the region, the current period is or most likely will represent the longest and deepest employment downturn when compared with previous post-war declines. We will continue to monitor employment trends in the Southeast coming out of this recession and keep you posted on significant developments.

By Michael Chriszt, an assistant vice president in the Atlanta Fed's research department

September 16, 2009 in Alabama, Employment, Florida, Georgia, Louisiana, Mississippi, Recession, Southeast, Tennessee | Permalink

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