Economic Data Roundup (01/27/2021)

1/27/21 8:00 AM

The latest regional job report from the U.S. Department of Labor revealed that nonfarm employment increased in 15 states in December, decreased in 11 states, and was essentially unchanged everywhere else. The largest absolute payrolls gains last month occurred in Texas (+64,200), Georgia (+44,700), and North Carolina (+33,600), whereas the largest declines in employment were found in Michigan (-64,400), California (-52,200), and Minnesota (-49,800). As for joblessness, the unemployment rate declined in 19 states in December and rose in 12 states. Such data, though, remain very noisy due to the ongoing disruptions of the pandemic, so it is important to not focus too heavily on the month-to-month changes in the numbers and instead pay more attention to the broader trends in the data. To this end the overall direction of the incoming figures suggests that the labor market recovery is continuing in America.


For example, the average rate of joblessness was 5.9 percent in December, above the 3.1 percent average historical low but a significant improvement from a high of 14.5 percent that many states experienced in April of last year. Of course these are averages and therefore do not fully reflect the large regional differences that exist. The highest rates of joblessness, for instance, were found in Hawaii (9.3 percent) and Nevada (9.2 percent) in December, two states with economies highly dependent on the leisure and hospitality industry which has been one of the hardest hit sectors of the economy throughout the pandemic. Nebraska and South Dakota, on the other hand, had the lowest rates of unemployment in December at 3.0 percent each, states with more spread out populations and economies less reliant on close-proximity service-providing industries. Regional differences, though, have to some extent always existed and will continue to long after this crisis fades. However, during these next few months it would not be surprising if the states we see leading the labor market recovery are the same states leading in terms of distributing the vaccine. Moreover, improving vaccination rates will unlock more hiring in high-contact industries, which include many of the brick-and-mortar small businesses that have borne the brunt of the economic weakness this cycle.




Sources: U.S. DoL

Post author: Charles Couch