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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.
July 22, 2014
A Closer Look at Progress in Selected Southeastern Labor Markets
The U.S. Bureau of Labor Statistics compiles unemployment rates at the county level, which allows a glimpse of how local labor markets are performing. The interactive map of the Southeast below depicts the progress across the region since the second quarter of 2009, which the National Bureau of Economic Research defines as the end of the most recent recession.
Areas in southern Louisiana stand out as having had low unemployment even in 2009, thanks in large part to the strength of the energy sector and continued post-Katrina development. Fast-forward to 2014, and we also see considerable improvement in other areas. But some parts of the Southeast are still struggling with high unemployment.
Although the map shows improvement since the end of the recession, it doesn’t show whether we are back to normal, or even what “normal” looks like. Are local labor markets as strong as they were before the recession? Drilling down a bit more, we separated counties into two categories: those defined as a metropolitan statistical area (MSA) by the U.S. Census Bureau, and those not defined as an MSA. Those counties within an MSA are typically more urban and densely populated, and non-MSA counties tend to be more rural and less populated. In the chart below, we have calculated the unemployment rate for both MSA and non-MSA counties. The size of the bubble represents the size of the labor force, and the solid lines show the national average unemployment rate in each of the two time periods.
In 2007, non-MSA counties in Georgia, Tennessee, and Mississippi had unemployment rates above the 2007 average, whereas all but Mississippi had MSA unemployment rates below the national average. In 2014, unemployment in non-MSA counties in Alabama, Georgia, Tennessee, and Mississippi was above the national average, and all but Georgia had MSA unemployment below the national average. So, above-average unemployment is generally more prevalent in non-MSAs than in MSAs, seemingly a persistent problem. (Florida and Louisiana are the two exceptions in the region, with average or below-average MSA and non-MSA unemployment rates before and after the recession.)
Another way to gauge labor market strength is to measure job growth. Generally speaking, unemployment and job growth move in opposite directions, although declines in labor force participation can also cause the unemployment rate to decline even without strong job growth. In the chart below, to view how MSA and non-MSA counties fared across states, we have plotted year-over-year employment growth in 2007 (prior to the recession) against growth for the year ending with the first quarter of 2014. Once again, the size of the bubble represents the size of the labor force in 2014. We see that across the region, employment growth was weakest among non-MSA counties in both periods, but employment growth was generally stronger among MSA counties in both periods (although only MSA counties in Florida and Louisiana experienced above average employment growth in 2007 and 2014).
The unemployment map demonstrates that labor market conditions have improved in most parts of the Southeast since the end of the recession. However, many smaller rural communities continue to struggle with higher levels of unemployment and weaker employment growth than their big-city neighbors.
By John Robertson, a vice president and senior economist, and
Whitney Mancuso, a senior economic analyst, both of the Atlanta Fed's research department
July 3, 2014
Separating Out Job Groups in the Sixth District
There’s been a lot of discussion about the decline of jobs considered to be “mid-skilled” during the last several years. A recent Regional Economic Press Briefing prepared by our friends at the New York Fed took another look at this important issue. They aggregate occupations into three skill categories: higher-skill, middle-skill, and lower-skill professions. The specific occupations of each category are outlined in the following chart:
Using data from the U.S. Bureau of Labor Statistics’ Occupational Employment Statistics dataset, we were able to decompose the Sixth District states’ labor markets using the same skill categories that the New York Fed used.
Both the higher-skill and lower-skill categories grew from 2007 to 2013, and the middle-skill group shrank for both the United States and Sixth District. The proportion by which the middle-skill group’s share shrank during the time period was roughly similar for the nation and Sixth District, with the difference between the two differences being less than 1 percentage point. Yet more interesting, we were able to compare how these groups’ compositions have changed prior to and following the recession for each Sixth District state. You can see a state-by-state decomposition in the following chart:
Florida, Georgia, and Tennessee all saw their share of their middle-skill jobs shrink by roughly 4 percentage points during the time period, while Alabama’s share of middle skill jobs decreased by about 3 percentage points. The middle-skill groups in Louisiana and Mississippi, often the outliers in Sixth District data, shrank by the smallest amounts during the time period 2007–13, roughly by 2 percentage points. However, Louisiana’s share of higher-skill occupations was the only one not to expand from 2007 to 2013. The shrinking share of middle-skill jobs in that state was almost solely the result of a growing share of lower-skill jobs.
To understand how the data in the chart above came about, we can look at changes in the composition of these groups (higher-, middle-, and lower-skill groups) by state during both the recession and recovery. The first chart below shows that the middle-skill groups took a particularly hard hit across the nation and District in the previous recession...
...while those middle-skill jobs have been the most sluggish to come back, both across the nation and the Sixth District, as the following chart shows:
By Mark Carter and Sandra Ghizoni, both senior economic analysts in the Atlanta Fed’s research department
October 4, 2012
Middle Tennessee Economy Slogging Along, but Bright Spots Emerging
Along with the rest of the state, Middle Tennessee's economy has been growing slowly since the end of the recession. Unemployment rates across the mid-state remain stubbornly high, but there are some positive signs appearing in manufacturing and housing.
On Friday, September 21, I attended the annual Middle Tennessee State University (MTSU) Economic Outlook Conference hosted by the MTSU Business and Economic Research Center. The center also happens to be a member of the Atlanta Fed's Local Economic Analysis and Research Network (or LEARN) program. The center's director, Dr. David Penn, offered his views on where Tennessee and the Nashville economies are headed.
Dr. Penn's presentation covered labor markets, manufacturing, housing, and state sales tax revenues. While there was some good news, I'll start with the not-so-good news.
There is an old saying: "You're moving slower than pond water." This saying could apply to the unemployment rate in Tennessee because it is not coming down very fast. Although Nashville is still generating jobs, this job generation is at a painfully slow pace. The metro area's seasonally adjusted total employment level is only up by 1,000 compared to a year ago (through August). Construction employment in Middle Tennessee has cooled off considerably, and several months of negative job growth in the education and health care sectors along with the government shedding jobs has largely offset gains in other sectors. The manufacturing sector of the job market has been rising consistently over the year. Professional services and the leisure and hospitality sectors are also demonstrating steady job growth. Durable goods manufacturing has been especially strong.
This is certainly not applicable to every part of Middle Tennessee, as some areas have already recovered from job losses experienced during the recession. Clarksville, for example, has done quite well, as they now exceed their prerecession employment level, and Nashville is getting closer to regaining all jobs lost during the recession.
The current rate of unemployment in the Nashville metro area has dropped from 8 percent to 7 percent on a seasonally adjusted basis, but has ticked up from 6.5 percent in April. One reason for the recent uptick in Nashville's unemployment rate is that the number of people reentering the labor force has increased sharply since the first quarter of the year.
On the brighter side, Dr. Penn stated that the state's housing market is getting better. The Nashville housing market is experiencing price growth for the first time since 2008. The city has seen home sales rise 27 percent over last year's low levels. As a result, the sales of building materials have risen. In addition, Nashville's sales tax collections are higher now than before the recession; however, inflation-adjusted purchasing power is 6.8 percent lower.
In the end, Dr. Penn's near-term expectations are for slow employment growth, a slower rise in the rate of sales tax collections, mild increases in construction activity, and a drifting down of the unemployment rate. Not the rosiest of forecasts, but it could be a lot worse.
By Troy Balthrop, REIN analyst at the Nashville Branch of the Federal Reserve Bank of Atlanta's Nashville Branch
April 7, 2011
The Great Rebalancing: State and local government fiscal challenges
Earlier this week, Federal Reserve Bank of Atlanta President Dennis Lockhart spoke in West Palm Beach, Fla., about the current phase of American economic history, which he termed the "Great Rebalancing." (In his remarks, Lockhart noted that he borrowed this term from a reference to the economic recovery in Britain.) Lockhart sees three rebalancing processes now under way: rebalancing of consumption and savings, regulatory rebalancing, and fiscal rebalancing. With regard to the latter, he noted that
"Spending cuts have begun at all government levels, and some improvement in revenues is now being reported. The extent of cuts is being discussed, quite literally, as we speak."
While, as Lockhart noted, it is too early to determine the outcome of overall fiscal rebalancing at the national or state level, we can look at public sector employment at the state and local levels to see where some of this rebalancing currently is taking place. State and local employment data through February show that the number of public sector workers (excluding federal employment) has been on the decline for some time, while private sector employment is increasing.
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With regard to improvements in revenues, the data are more clear. Looking at the states in the Southeast, revenues are indeed on the upswing.
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A recent report by the Nelson A. Rockefeller Institute of Government, written by Lucy Dadayan, senior policy analyst, and Donald Boyd, senior fellow, confirms that
"After the deepest recession since the Great Depression, most states are now on the gradual road to tax revenue recovery."
President Lockhart's view that fiscal rebalancing lies mostly ahead of us is confirmed by the Rockefeller Institute authors, as they caution that
"Broad state fiscal conditions remain fragile. The longer-term outlook is still ominous due to record revenue declines during the Great Recession, spending trendlines still pointing upward, and unemployment rates remaining nearly double their prerecession levels, to name a few. While some economic indicators signal improvement in overall conditions, fiscal recovery for the states typically lags a national turnaround and is likely to take several years."
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department
July 22, 2014
A Closer Look at Progress in Selected Southeastern Labor Markets
The U.S. Bureau of Labor Statistics compiles unemployment rates at the county level, which allows a glimpse of how local labor markets are performing. The interactive map of the Southeast below depicts the progress across the region since the second quarter of 2009, which the National Bureau of Economic Research defines as the end of the most recent recession.
Areas in southern Louisiana stand out as having had low unemployment even in 2009, thanks in large part to the strength of the energy sector and continued post-Katrina development. Fast-forward to 2014, and we also see considerable improvement in other areas. But some parts of the Southeast are still struggling with high unemployment.
Although the map shows improvement since the end of the recession, it doesn’t show whether we are back to normal, or even what “normal” looks like. Are local labor markets as strong as they were before the recession? Drilling down a bit more, we separated counties into two categories: those defined as a metropolitan statistical area (MSA) by the U.S. Census Bureau, and those not defined as an MSA. Those counties within an MSA are typically more urban and densely populated, and non-MSA counties tend to be more rural and less populated. In the chart below, we have calculated the unemployment rate for both MSA and non-MSA counties. The size of the bubble represents the size of the labor force, and the solid lines show the national average unemployment rate in each of the two time periods.
In 2007, non-MSA counties in Georgia, Tennessee, and Mississippi had unemployment rates above the 2007 average, whereas all but Mississippi had MSA unemployment rates below the national average. In 2014, unemployment in non-MSA counties in Alabama, Georgia, Tennessee, and Mississippi was above the national average, and all but Georgia had MSA unemployment below the national average. So, above-average unemployment is generally more prevalent in non-MSAs than in MSAs, seemingly a persistent problem. (Florida and Louisiana are the two exceptions in the region, with average or below-average MSA and non-MSA unemployment rates before and after the recession.)
Another way to gauge labor market strength is to measure job growth. Generally speaking, unemployment and job growth move in opposite directions, although declines in labor force participation can also cause the unemployment rate to decline even without strong job growth. In the chart below, to view how MSA and non-MSA counties fared across states, we have plotted year-over-year employment growth in 2007 (prior to the recession) against growth for the year ending with the first quarter of 2014. Once again, the size of the bubble represents the size of the labor force in 2014. We see that across the region, employment growth was weakest among non-MSA counties in both periods, but employment growth was generally stronger among MSA counties in both periods (although only MSA counties in Florida and Louisiana experienced above average employment growth in 2007 and 2014).
The unemployment map demonstrates that labor market conditions have improved in most parts of the Southeast since the end of the recession. However, many smaller rural communities continue to struggle with higher levels of unemployment and weaker employment growth than their big-city neighbors.
By John Robertson, a vice president and senior economist, and
Whitney Mancuso, a senior economic analyst, both of the Atlanta Fed's research department
July 3, 2014
Separating Out Job Groups in the Sixth District
There’s been a lot of discussion about the decline of jobs considered to be “mid-skilled” during the last several years. A recent Regional Economic Press Briefing prepared by our friends at the New York Fed took another look at this important issue. They aggregate occupations into three skill categories: higher-skill, middle-skill, and lower-skill professions. The specific occupations of each category are outlined in the following chart:
Using data from the U.S. Bureau of Labor Statistics’ Occupational Employment Statistics dataset, we were able to decompose the Sixth District states’ labor markets using the same skill categories that the New York Fed used.
Both the higher-skill and lower-skill categories grew from 2007 to 2013, and the middle-skill group shrank for both the United States and Sixth District. The proportion by which the middle-skill group’s share shrank during the time period was roughly similar for the nation and Sixth District, with the difference between the two differences being less than 1 percentage point. Yet more interesting, we were able to compare how these groups’ compositions have changed prior to and following the recession for each Sixth District state. You can see a state-by-state decomposition in the following chart:
Florida, Georgia, and Tennessee all saw their share of their middle-skill jobs shrink by roughly 4 percentage points during the time period, while Alabama’s share of middle skill jobs decreased by about 3 percentage points. The middle-skill groups in Louisiana and Mississippi, often the outliers in Sixth District data, shrank by the smallest amounts during the time period 2007–13, roughly by 2 percentage points. However, Louisiana’s share of higher-skill occupations was the only one not to expand from 2007 to 2013. The shrinking share of middle-skill jobs in that state was almost solely the result of a growing share of lower-skill jobs.
To understand how the data in the chart above came about, we can look at changes in the composition of these groups (higher-, middle-, and lower-skill groups) by state during both the recession and recovery. The first chart below shows that the middle-skill groups took a particularly hard hit across the nation and District in the previous recession...
...while those middle-skill jobs have been the most sluggish to come back, both across the nation and the Sixth District, as the following chart shows:
By Mark Carter and Sandra Ghizoni, both senior economic analysts in the Atlanta Fed’s research department
October 4, 2012
Middle Tennessee Economy Slogging Along, but Bright Spots Emerging
Along with the rest of the state, Middle Tennessee's economy has been growing slowly since the end of the recession. Unemployment rates across the mid-state remain stubbornly high, but there are some positive signs appearing in manufacturing and housing.
On Friday, September 21, I attended the annual Middle Tennessee State University (MTSU) Economic Outlook Conference hosted by the MTSU Business and Economic Research Center. The center also happens to be a member of the Atlanta Fed's Local Economic Analysis and Research Network (or LEARN) program. The center's director, Dr. David Penn, offered his views on where Tennessee and the Nashville economies are headed.
Dr. Penn's presentation covered labor markets, manufacturing, housing, and state sales tax revenues. While there was some good news, I'll start with the not-so-good news.
There is an old saying: "You're moving slower than pond water." This saying could apply to the unemployment rate in Tennessee because it is not coming down very fast. Although Nashville is still generating jobs, this job generation is at a painfully slow pace. The metro area's seasonally adjusted total employment level is only up by 1,000 compared to a year ago (through August). Construction employment in Middle Tennessee has cooled off considerably, and several months of negative job growth in the education and health care sectors along with the government shedding jobs has largely offset gains in other sectors. The manufacturing sector of the job market has been rising consistently over the year. Professional services and the leisure and hospitality sectors are also demonstrating steady job growth. Durable goods manufacturing has been especially strong.
This is certainly not applicable to every part of Middle Tennessee, as some areas have already recovered from job losses experienced during the recession. Clarksville, for example, has done quite well, as they now exceed their prerecession employment level, and Nashville is getting closer to regaining all jobs lost during the recession.
The current rate of unemployment in the Nashville metro area has dropped from 8 percent to 7 percent on a seasonally adjusted basis, but has ticked up from 6.5 percent in April. One reason for the recent uptick in Nashville's unemployment rate is that the number of people reentering the labor force has increased sharply since the first quarter of the year.
On the brighter side, Dr. Penn stated that the state's housing market is getting better. The Nashville housing market is experiencing price growth for the first time since 2008. The city has seen home sales rise 27 percent over last year's low levels. As a result, the sales of building materials have risen. In addition, Nashville's sales tax collections are higher now than before the recession; however, inflation-adjusted purchasing power is 6.8 percent lower.
In the end, Dr. Penn's near-term expectations are for slow employment growth, a slower rise in the rate of sales tax collections, mild increases in construction activity, and a drifting down of the unemployment rate. Not the rosiest of forecasts, but it could be a lot worse.
By Troy Balthrop, REIN analyst at the Nashville Branch of the Federal Reserve Bank of Atlanta's Nashville Branch
April 7, 2011
The Great Rebalancing: State and local government fiscal challenges
Earlier this week, Federal Reserve Bank of Atlanta President Dennis Lockhart spoke in West Palm Beach, Fla., about the current phase of American economic history, which he termed the "Great Rebalancing." (In his remarks, Lockhart noted that he borrowed this term from a reference to the economic recovery in Britain.) Lockhart sees three rebalancing processes now under way: rebalancing of consumption and savings, regulatory rebalancing, and fiscal rebalancing. With regard to the latter, he noted that
"Spending cuts have begun at all government levels, and some improvement in revenues is now being reported. The extent of cuts is being discussed, quite literally, as we speak."
While, as Lockhart noted, it is too early to determine the outcome of overall fiscal rebalancing at the national or state level, we can look at public sector employment at the state and local levels to see where some of this rebalancing currently is taking place. State and local employment data through February show that the number of public sector workers (excluding federal employment) has been on the decline for some time, while private sector employment is increasing.
|
|
|
Enlarge
|
With regard to improvements in revenues, the data are more clear. Looking at the states in the Southeast, revenues are indeed on the upswing.
|
|
|
Enlarge
|
A recent report by the Nelson A. Rockefeller Institute of Government, written by Lucy Dadayan, senior policy analyst, and Donald Boyd, senior fellow, confirms that
"After the deepest recession since the Great Depression, most states are now on the gradual road to tax revenue recovery."
President Lockhart's view that fiscal rebalancing lies mostly ahead of us is confirmed by the Rockefeller Institute authors, as they caution that
"Broad state fiscal conditions remain fragile. The longer-term outlook is still ominous due to record revenue declines during the Great Recession, spending trendlines still pointing upward, and unemployment rates remaining nearly double their prerecession levels, to name a few. While some economic indicators signal improvement in overall conditions, fiscal recovery for the states typically lags a national turnaround and is likely to take several years."
By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department
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