Economy

A Closer Look At Regional Labor Market Trends

1/26/17 8:00 AM

iStock-626627280.jpgA few weeks after every big monthly job report comes out, more detailed information is released showing a breakdown of the payroll gains and losses in each state. The latest of these extended reports showed that five states had statistically significant month-over-month decreases in nonfarm payroll employment in December, while just three states had significant increases. Over the past year, though, twenty-six states and the District of Columbia had statistically significant increases in nonfarm payroll employment. The largest absolute gains in employment in 2016 occurred in California (+332,500), Florida (+251,400), and Texas (+210,200). Only two states, Wyoming (-7,900) and North Dakota (-7,800), had significant year-over-year declines in employment in 2016.

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As for joblessness, ten states in December experienced statistically significant unemployment rate decreases from the prior month, and only one state saw a notable increase. Compared to a year ago, eleven states had statistically significant unemployment rate decreases, with the largest decline being found in Massachusetts (-2.1 percentage points). Oklahoma and Pennsylvania were the only states with significant unemployment rate increases over the past year (+0.9 percentage point each). The lowest unemployment rate in the country in December could be found in New Hampshire (2.6 percent), while Alaska and New Mexico had the highest rates of joblessness last month (6.7 percent and 6.6 percent, respectively). For comparison, the national rate of unemployment (U-3) was 4.7 percent in December.

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Overall, joblessness continued to decline across most of the country last year, albeit at a slower pace as the economy inched closer to full employment. Looking ahead, the unemployment rate could continue to drift lower in 2017, as renewed business optimism resulting from the November elections should be supportive of additional hiring and investment. For example, 44.1 percent of business leaders recently surveyed by the Federal Reserve Bank of New York said that they expect the total number of employees at their firm to increase over the next twelve months, compared to just 19.1 percent who anticipate a reduction in staff size. Moreover, continued hiring and further decline in the unemployment rate in 2017 could result in another modest uptick in wage growth, good news for consumers but perhaps bad news for employers.

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Sources: Econoday, U.S. DoL, FRBNY, Twitter, BI, Calculated Risk, FRBA, FRBSL

Post author: Charles Couch