Earlier this month we learned that nonfarm employment in America started to bounce back in May, and recently-released regional data from the U.S. Department of Labor confirmed that such improvements occurred across most of the country. Specifically, nonfarm employment increased in 46 states in May, decreased in Hawaii, and was essentially unchanged everywhere else. The largest absolute gains occurred in Texas (+237,800), Pennsylvania (+198,300), and Florida (+182,900) last month, while the largest percentage increases occurred in Vermont (+6.4 percent), Michigan (+5.2 percent), and Montana and Pennsylvania (+4.0 percent each). As for joblessness, the unemployment rate fell in 38 states in May, climbed in 3 states, and remained stable everywhere else.
The broad improvements were expected since the shelter-in-place orders that devastated the economy started to be lifted in May. However, lingering occupancy restrictions and other social distancing practices have slowed the rebound in certain areas. The leisure and hospitality sector, for instance, has experienced a more muted recovery in this environment, and unsurprisingly casino- and convention-dependent Nevada once again had the highest unemployment rate in the whole country last month at 25.3 percent. The jobless rate in Florida similarly climbed to a record high in May (14.5 percent) due in part to weak tourism, and this industry could continue to struggle from a relatively softer bounce back in demand, e.g. consumers reluctant to go on vacation even as the lockdowns are lifted. Walt Disney World, though, is optimistic and announced a phased re-opening of its theme parks beginning in July. The NBA even plans to finish the remainder of its season at the Orlando resort, with all teams staying at the park’s hotels. Many other states face a similar collection of challenges and green shoots unique to their respective local economies, but for every region of the country it seems clear that for the recovery to gain momentum the “second wave” of the virus will need to be kept under control while still avoiding another GDP-destroying blanket lockdown.
Sources: Econoday, U.S. DoL, Wells Fargo, FRBSL