In the latest edition of Southeastern Insights, my colleagues in the Atlanta Fed's Regional Economic Information Network (REIN) conveyed that most regional business contacts' staffing levels increased over the past couple of months. The recent release of state-level labor market data from the payroll survey produced by the U.S. Bureau of Labor Statistics supports these anecdotal reports.
Nearly all Sixth District states added new payrolls in August. In total, the region added 51,100 net jobs, following 38,200 new payrolls in July (revised up from 27,100). Florida was among the top job contributors in the nation, adding 22,700 new payrolls in August. The only job losses in the Sixth District occurred in Mississippi, which subtracted 4,600 (see the chart).
The bulk of new jobs in the Sixth District came from goods-producing industries such as construction and manufacturing, with 25,200 jobs added on net. Florida alone contributed 10,600 of these jobs, with 6,100 added to the construction sector. Georgia added 7,900 goods-producing jobs, with 5,500 added to the manufacturing sector.
Gains in the professional and business services industry were also fairly widespread, with Sixth District states adding 15,500 payrolls to the sector in August. Only two sectors subtracted payrolls: leisure and hospitality (down 1,300 payrolls) and financial activities (down 200). Though neither sector subtracted payrolls in all states, most of the leisure and hospitality job losses occurred in Florida, which shed 5,800 payrolls, and most financial activities job losses were in Georgia, which lost 1,800 payrolls on net.
However, similar to my post last month about July's regional labor market data, jobs increased on aggregate in Sixth District states in August. However, the unemployment rate increased.
The aggregate unemployment rate for the Sixth District ticked up to 6.9 percent in August from 6.7 percent in July (see the chart). In three of the six District states—Georgia, Louisiana, and Tennessee—the unemployment rate continued its upward trend (now for four straight months). Georgia had the highest unemployment rate among the states in August, at 8.1 percent, a notable 0.4 percentage point increase from 7.7 percent in July. Mississippi's unemployment rate, though still one of the highest in the nation, declined for the first time in four months in August to 7.9 percent, from 8.0 percent in July.
So why did the report reflect an increase in jobs and a rise in the unemployment rate? Though there is some ambiguity about a rising unemployment rate accompanying decent employment growth, one possible explanation is that the number of people looking for work increased more than the number hired. The labor force participation rate (LFPR) is an indicator that supports this notion. In fact, the data show that the LFPR increased in most Sixth District states during the last couple of months. Perhaps recent improving trends in labor market conditions made people more confident in their ability to find employment, thus encouraging them to look for jobs.
The next release of state-level labor market data will be October 21. We'll have to wait and see if this trend continues.