(All numbers adjusted for seasonal effects)
The unemployment rate in Hampton Roads declined for the third consecutive month, decreasing to 6.8% in January 2012. The region’s unemployment rate peaked at 7.5% in January of 2010, with a subsequent peak at 7.3% in October of 2011. The region’s unemployment rate temporarily dropped to 6.7% in May of 2011, which was brought about by declining labor force participation rates rather than more individuals finding employment. The January 2012 improvement in the unemployment rate was accompanied by both strong labor force growth (+6) and an even stronger improvement in the number of employed persons (+9걔). The labor force has been expanding for eight of the last nine months, indicating that the labor market situation improved regionally during that period, even as Hampton Roads’ unemployment rate increased over 7%. The improving unemployment data supports the recent upward revision in payroll employment (+7) in the region (see the Mar 26, 2012 Special Report: http://hrpdcva.gov/Documents/Economics/2012/SR14_Employment_Revision.pdf).
The January unemployment rate also represents a relative improvement in the region’s unemployment rate, as the gap between Hampton Roads’ unemployment rate and the nation’s fell from 2.65 percentage points in October 2009 to 1.35 percentage points in December of 2011 and was back up to 1.42 percentage points this January; the region’s unemployment rate has averaged 1.65 percentage points below the nation’s since 2000.
Nationally, 345 out of the 372 total metropolitan areas experienced declining unemployment rates, but only 83 areas had unemployment rates lower than 7%. During normal economic conditions, the natural rate of unemployment is approximately 5%. This report confirms U.S. unemployment data indicating improving economic conditions, but an economy that still operates far below potential.