Authored by James Clary, Economist
The Metropolitan Employment and Unemployment Report for July 2012 was released by the Bureau of Labor Statistics (BLS) on August 28. This report marks the fifth anniversary of the previous employment peak in Hampton Roads (July 2007), and thus serves as an excellent opportunity to benchmark the progress that the region has achieved since the end of the recession.
- Year-over-year employment growth has been positive since November 2011, and the rate of growth has increased from a low of 0.03% year over year in April 2012 to 0.94% in July 2012
- Seasonally adjusted payrolls have generally increased since September 2011, though with two single months of declines, and there were 12꺜 more jobs in Hampton Roads this July than there were 10 months ago.
- The level of employment is still concerning, as the region remains 34 jobs below the peak employment of July 2007, which represents a decline of 4.4%; national employment is only down 3.5% from its prerecession peak
- With average job growth (513/month) the region would return to previous levels of employment by February 2018.
- With job growth equal to the region’s peak year of 1997 (averaged 1/month), the region would reach its prerecession peak in July 2014.
- During the past two months the region has added more than 3 jobs, the most consistent job growth this region has experienced since before the recession. The last time Hampton Roads had two consecutive months of +3 payroll expansions was September/October 1997.
- This said, optimism for continued regional recovery should be tempered until issues with the federal budget are resolved, particularly with relation to sequestration.
- This is an important time to benchmark industry employment, since the prerecession peak was July 2007, allowing for year over year comparisons of growth
- The only gainers over this five year period from July 2007 to July 2012 were healthcare (+8), federal (+6), education (+3), and state government jobs (+1); all industries that are largely tied to the federal or state government
- Construction and natural resources lost 17 jobs over the previous five years, this industry is primarily construction in Hampton Roads
- Almost all other industries saw declining employment over this time period, headlined by retail trade (-7귔) and manufacturing (-5)
- Year-over-year, construction (-4), information (-900) and scientific & technical services (-700) have continued to lose jobs since July 2011.
- Federal (+1), retail (+2), administrative (+2), and education (+2) have all seen growth over the past year
- Information has been hit particularly hard in Hampton Roads since the recession. Information employment is down 7.7% over the past year, compared to a small 0.52% decline nationally, and is down 30.77% since July 2007, while nationally, information services have only declined by 12.81%.
- Seasonally adjusted labor force contracted on a regional, state, and national level in July 2007, even as the number of unemployed increased. These forces conspired to push the unemployment rate higher, and the regional unemployment rate increased by 0.16% in July 2012 to 6.73%, up significantly from the March 2012 unemployment rate of 6.35% in Hampton Roads.
- It is too early to determine a trend, but it is worth noting that the underlying data in the unemployment statistics usually anticipate changes in payrolls by a few periods. This bears watching and weighs heavily on any optimism that could be generated from the strong regional payroll growth.
- The nation’s unemployment rate increased by 0.04% in July 2011, while the state’s increased by 0.19%, both numbers are seasonally adjusted.
- Each of the individual cities and counties in Hampton Roads had an unemployment rate in July 2012 that was 1.96 to 2.30 times greater than their unemployment rate in July 2007.
- Note: the seasonal adjustments to the state and national numbers were done by the BLS, while the regional unemployment numbers were seasonally adjusted by the HRPDC staff using the “Census X12” method.