Moderator: Welcome to Southeastern Economic Perspectives, an occasional podcast from the Federal Reserve Bank of Atlanta. I'm Jean Tate, and Menbere Shiferaw, an analyst who specializes in the Sixth District, is joining me to discuss employment trends in the District.
Thank you for joining me, Menbere.
Menbere Shiferaw: Thanks for having me.
Moderator: The regional and state employment figures for February were released Friday, March 26. How did the Sixth District perform in terms of employment?
Shiferaw: In terms of payroll jobs, the Sixth District performed better than it had in the previous months. In the month of February, the District added about 37,000 jobs. This was after it lost 60,000 jobs in December and another 3,000 jobs in January. Now, the job gain in February is actually one of only three months the District has added jobs since the onset of the most recent 2007 to 2009 recession. With that being said, keep in mind that state-level data is volatile on a month-to-month basis, because, for example, the data comes from a very small sample size as compared to the nation. So one month's worth of data doesn't necessarily translate into a trend, so the gain of February does not necessarily mean that we will continue to see job gains going forward.
But one interesting observation from the February payroll data I would like to mention is the sizable job gain in Florida. Florida accounted for a majority of the jobs that were added in the District in February—it added about 27,000 jobs. Much of this gain was in its employment services sector. This is the sector that houses temporary hiring, and the increase in temporary hiring is consistent with the story that we've been hearing at the national level for several months now, that many firms are hiring temps in response to some of the increase in business activity. So at the national level, we've seen an increase in temp hiring since about the summer of 2009.
Moderator: You mentioned that one month's worth of data doesn't necessarily translate into a trend. Have you seen any other trends in labor markets in the Sixth District states?
Shiferaw: For the District as a whole, job losses were the deepest in the fourth quarter of 2008 and the first quarter of 2009, similar to what we saw at the national level. With the exception of December 2009, which was a particularly weak payroll month for our District, we've seen the pace of job losses ease even further since October of 2009.
Now, much of the trend that we're seeing at the District level is dominated by Georgia and Florida because they make up about three-fifths of all payroll jobs in the District. If we look at the payroll jobs of other District states, their trends may not necessarily mirror the trend of the District as a whole. One state that stands out, for example, is Louisiana. In 2008, when most of the other District states—and the rest of the nation for that matter—was shedding jobs, Louisiana was still adding a decent number of jobs. So, Louisiana actually did not experience any persistent deep declines in payrolls until 2009.
Moderator: Is Louisiana—are they still adding jobs because they're still trying to rebuild as a result of Hurricane Katrina?
Shiferaw: For most of 2008, that was the case. Louisiana was supported by the rebuilding activity of Katrina. But, starting in 2009, the support activity began to wane, so that's when Louisiana fell into recession and we started to see deeper and deeper job losses.
Moderator: What's the difference between payroll data and employment or unemployment data?
Shiferaw: They come from two different surveys [from the Bureau of Labor Statistics]. You have the establishment survey [also known as the Current Employment Statistics, or payroll, survey], which tells you how many jobs—this is just payroll jobs that employers report how many jobs were lost in a given month. Then the household survey [also known as the Current Population Statistics survey] is when the Census actually goes out to individuals' households and asks if they are employed or unemployed. So that's household unemployment, and that's where the unemployment rate is derived from.
Moderator: We've talked about some of the payroll jobs and how those numbers have seemed to ease for several months. Are we seeing similar improvements in household employment? Are the unemployment rates for the District improving?
Shiferaw: The household employment data actually paints a more pessimistic picture of the District labor markets, as compared to payroll jobs. The unemployment rate in the District was 11 percent in February, and this was up from 10.9 percent the month before. This 11 percent is the highest rate since the data series began in 1976. Actually, back during the 81–82 recession, the District unemployment rate had peaked at 10.9 percent, so we've clearly surpassed that now.
Now, looking at individual states, unemployment rates in Florida and Georgia—in Florida, it's 12.2 percent, and in Georgia, it's 10.5 percent. Both are at a record high. And the rates for the other District states—well, most of them, except Louisiana—are the highest since the 81–82 recession.
Keep in mind all of these unemployment rates that I just mentioned don't take into account any type of underemployment. By underemployment, I mean workers that are working part-time for economic reasons, or other workers…that have dropped out of the labor force because they've been discouraged by job prospects. So, if you actually take into account all of these underemployed people, the unemployment rate will be much higher. For the state of Georgia, for example, the average unemployment rate in 2009 was 11.1 percent. If you add all the underemployed workers, this rate actually goes up to 16.9 percent.
But on a more positive note, the unemployment rate has leveled off slightly in Tennessee and Louisiana in recent months, which is a similar type of trend that we've seen at the national average.
Moderator: So how does the unemployment rate in the Sixth District compare to the national average?
Shiferaw: The national unemployment rate was 9.7 percent in February, and it actually remained at 9.7 percent in March, as we saw in the data that was released this morning. The rate has declined or remained stagnant since October of 2009, but if you look at the unemployment rate for our District, which was at 11 percent in February, it has continued to increase at a fairly steady pace since the onset of the most recent recession.
Moreover, all of our District states, except for the state of Louisiana, have unemployment rates above the national average. Florida's unemployment rate, for example—12.2 percent—is actually one of the highest in the nation, only after California, Nevada, Michigan, South Carolina, and Rhode Island.
Moderator: In summary, what would you say is the outlook for employment or unemployment within the Sixth District?
Shiferaw: In all, both the national and Sixth District labor markets remain considerably weak, and the conditions in the Sixth District appear to be worse than at the national level. Going forward, we'll likely see job losses continue to ease, but that's really not the main issue any more. The key to labor market recovery going forward will be in the market's ability to create job openings and fill them.
Moderator: Thanks, Menbere.
Shiferaw: You're welcome. Thanks for having me.
Moderator: Again, we've been listening to Atlanta Fed regional research team member Menbere Shiferaw provide insight into employment trends in the Southeast.
This concludes our Southeastern Economic Perspectives podcast. Thanks for listening, and please return for more podcasts. If you have comments, please send us e-mail at email@example.com.