ETSU
Bureau of Business and Economic Research
THE METROPOLITAN AREA (CSA)
The recession deepened in the Tri-Cities metro area labor market during
the fourth quarter. Employment slumped
by 0.9% to 231,849, a loss of over 2,100 jobs compared to the same period in
2007. The number of unemployed workers
increased 36.3% to 15,190, a jump of 4,044 on a year-to-year basis. The large increase in unemployment is not
just the workers who have lost their jobs, but also includes nearly 2,000
additional workers who have entered the labor force looking for employment to
help support their family incomes. The
jobless rate for the Tri-Cities area rose to 6.2%, compared to only 4.5% a year
ago.
In the fourteen NAICS industry sectors, employment levels were higher in
three, lower in seven, and unchanged in three (compared to four, nine, and one
in the third quarter). Job growth
occurred in education & health, finance, and information services. Employment declined in retail trade,
professional & business services, durable manufacturing, government,
nondurable manufacturing, wholesale trade, transport & utilities, and
leisure & hospitality. Employment
was stable in mining, construction, and other services.
Labor Force Employment Unemployment
Period Level Y-Y%Ch Level Y-Y%Ch Level Y-Y%Ch Rate_
2001 232,340 0.25 221,186 -0.47 11,155 17.23 4.80
2002 233,364 0.44 220,150 -0.47 13,214 18.46 5.66
2003 237,051 1.58 223,288 1.43 13,763 4.16 5.81
2004 236,141 -0.38 223,084 -0.09 13,057 -5.13 5.53
2005 237,424 0.54 224,919 0.82 12,505 -4.23 5.27
2006 241,968 1.91 230,567 2.51 11,402 -8.82 4.71
2007 243,069 0.45 232,397 0.79 10,672 -6.40 4.39
2008 245,150 0.86 231,067 -0.57 14,083 31.96 5.74
06:1 239,536 1.79 227,180 2.68 12,355 -12.22 5.16
06:2 241,501 2.02 229,921 2.56 11,580 -7.68 4.80
06:3 242,856 2.07 231,579 2.42 11,277 -4.62 4.64
06:4 243,980 1.78 233,585 2.39 10,395 -10.21 4.26
07:1 241,960 1.01 230,934 1.65 11,026 -10.76 4.56
07:2 241,671 0.07 231,747 0.79 9,924 -14.31 4.11
07:3 243,496 0.26 232,903 0.57 10,593 -6.07 4.35
07:4 245,148 0.48 234,002 0.18 11,146 7.23 4.55
08:1 242,981 0.42 230,511 -0.18 12,470 13.10 5.13
08:2 244,781 1.29 231,268 -0.21 13,513 36.17 5.52
08:3 245,802 0.95 230,642 -0.97 15,160 43.11 6.17
08:4 247,039 0.77 231,849 -0.92 15,190 36.28 6.15
THE
TRI-CITIES
Recession
trends continued to plague all three cities during the October to December
period. Job losses mounted while the
number of unemployed was swelled by new job seekers. Employment declined by 0.4% in
Labor Force Employment Unemployment
Period Level Y-Y%Ch Level Y-Y%Ch Level Y-Y%Ch Rate_
2001 27,153 0.37 25,981 -0.37 1,172 20.28 4.31
2002 27,194 0.15 25,775 -0.79 1,419 21.14 5.22
2003 27,691 1.83 26,071 1.15 1,620 14.15 5.85
2004 27,182 -1.84 25,629 -1.69 1,553 -4.14 5.71
2005 27,170 -0.05 25,749 0.47 1,421 -8.51 5.23
2006 27,696 1.93 26,435 2.66 1,261 -11.28 4.55
2007 27,706 0.04 26,485 0.19 1,221 -3.14 4.41
2008 27,936 0.83 26,388 -0.36 1,548 26.76 5.54
06:1 27,520 2.41 26,139 3.36 1,381 -12.77 5.02
06:2 27,715 2.08 26,408 2.71 1,306 -9.28 4.71
06:3 27,845 1.96 26,619 2.59 1,227 -9.99 4.41
06:4 27,702 1.30 26,574 2.01 1,128 -13.04 4.07
07:1 27,601 0.29 26,347 0.79 1,255 -9.13 4.55
07:2 27,591 -0.45 26,432 0.09 1,159 -11.25 4.20
07:3 27,805 -0.14 26,605 -0.05 1,200 -2.20 4.32
07:4 27,825 0.44 26,555 -0.07 1,270 12.56 4.56
08:1 27,596 -0.02 26,257 -0.34 1,340 6.78 4.85
08:2 27,858 0.97 26,399 -0.13 1,459 25.85 5.24
08:3 28,128 1.16 26,439 -0.63 1,689 40.77 6.00
08:4 28,163 1.22 26,460 -0.36 1,703 34.09 6.05
Labor Force Employment Unemployment
Period Level Y-Y%Ch Level Y-Y%Ch Level Y-Y%Ch Rate_
2001 51,885 -0.23 49,322 -0.84 2,563 13.36 4.94
2002 52,147 0.50 49,107 -0.44 3,040 18.59 5.83
2003 53,200 2.02 50,204 2.23 2,996 -1.44 5.63
2004 54,144 1.77 51,240 2.06 2,904 -3.07 5.36
2005 54,670 0.97 51,831 1.15 2,839 -2.26 5.19
2006 55,723 1.93 53,134 2.51 2,589 -8.81 4.65
2007 56,482 1.36 54,025 1.68 2,457 -5.08 4.35
2008 56,888 0.72 53,576 -0.83 3,311 34.76 5.82
06:1 54,916 1.12 52,100 1.93 2,816 -11.86 5.13
06:2 55,516 2.08 52,838 2.54 2,678 -6.27 4.82
06:3 55,669 2.03 53,165 2.40 2,504 -5.21 4.50
06:4 56,789 2.46 54,433 3.16 2,357 -11.45 4.15
07:1 56,089 2.14 53,621 2.92 2,468 -12.38 4.40
07:2 56,106 1.06 53,803 1.83 2,303 -14.00 4.10
07:3 56,422 1.35 53,956 1.49 2,465 -1.57 4.37
07:4 57,311 0.92 54,718 0.52 2,593 10.03 4.52
08:1 56,586 0.89 53,650 0.05 2,936 18.98 5.19
08:2 56,859 1.34 53,647 -0.29 3,212 39.49 5.65
08:3 56,727 0.54 53,196 -1.41 3,531 43.25 6.23
08:4 57,378 0.12 53,813 -1.66 3,565 37.50 6.21
Kingsport
Urbanized Area Labor Market
Labor Force Employment Unemployment
Period Level Y-Y%Ch Level Y-Y%Ch Level Y-Y%Ch Rate_
2001 45,468 0.25 43,413 -0.42 2,056 16.99 4.52
2002 45,401 -0.15 42,967 -1.03 2,435 18.44 5.36
2003 45,901 1.10 43,209 0.56 2,692 10.57 5.86
2004 45,130 -1.68 42,566 -1.49 2,564 -4.75 5.68
2005 45,272 0.32 42,847 0.66 2,425 -5.42 5.36
2006 46,178 2.00 44,012 2.72 2,166 -10.67 4.69
2007 46,103 -0.16 44,183 0.39 1,920 -11.36 4.17
2008 46,397 0.64 43,846 -0.76 2,552 32.87 5.50
06:1 45,668 2.02 43,358 3.18 2,310 -15.72 5.06
06:2 46,244 2.19 43,999 2.96 2,245 -10.95 4.85
06:3 46,526 2.23 44,314 2.64 2,212 -5.40 4.75
06:4 46,276 1.57 44,377 2.11 1,899 -9.59 4.10
07:1 45,816 0.32 43,806 1.03 2,009 -13.01 4.39
07:2 45,948 -0.64 44,140 0.32 1,808 -19.47 3.93
07:3 46,313 -0.46 44,362 0.11 1,952 -11.77 4.21
07:4 46,335 0.13 44,422 0.10 1,912 0.70 4.13
08:1 45,856 0.09 43,644 -0.37 2,212 10.08 4.82
08:2 46,445 1.08 43,950 -0.43 2,495 38.00 5.37
08:3 46,627 0.68 43,832 -1.19 2,795 43.20 5.99
08:4 46,662 0.71 43,957 -1.05 2,705 41.44 5.80
THE
UNITED STATES
The
national labor market slumped further into recession over the autumn
months. Employment fell by 1.5% to 144.5
million, a loss of over 2.2 million jobs compared to 2007. Unemployment levels increased for the sixth
quarter in a row reaching 10.2 million, a year-to-year increase of 45%. The fourth quarter unemployment rate was
6.6%, compared to 4.6% a year ago. As in
the regional labor market, the level of unemployment has been swollen by nearly
one million new job seekers entering the national labor force.
In
the fourteen NAICS industry sectors, employment levels were higher in four, and
lower in ten (compared to five and nine in the third quarter). Employment was up in only education &
health, government, mining, and other services.
Large job declines were reported in construction, retail trade,
professional & business services, and durable manufacturing. Smaller employment decreases were in leisure
& hospitality, finance, nondurable manufacturing, transport &
utilities, wholesale trade, and information services.
Labor Force Employment Unemployment
Period Level Y-Y%Ch Level Y-Y%Ch Level Y-Y%Ch Rate_ 2001 143,734 0.81 136,933 0.03 6,801 19.48 4.73 2002 144,863 0.79 136,485 -0.33 8,378 23.19 5.78 2003 146,510 1.14 137,736 0.92 8,774 4.73 5.99 2004 147,401 0.61 139,252 1.10 8,149 -7.12 5.53 2005 149,320 1.30 141,730 1.78 7,591 -6.86 5.08 2006 151,428 1.41 144,427 1.90 7,001 -7.77 4.62 2007 153,124 1.12 146,047 1.12 7,078 1.10 4.62 2008 154,287 0.76 145,362 -0.47 8,924 26.09 5.78 06:1 149,601 1.42 142,082 2.09 7,518 -9.70 5.03 06:2 151,154 1.34 144,221 1.81 6,933 -7.52 4.59 06:3 152,436 1.30 145,332 1.63 7,104 -4.96 4.66 06:4 152,520 1.59 146,073 2.10 6,446 -8.74 4.23 07:1 152,013 1.61 144,692 1.84 7,321 -2.63 4.82 07:2 152,811 1.10 146,040 1.26 6,771 -2.34 4.43 07:3 153,922 0.97 146,723 0.96 7,199 1.33 4.68 07:4 153,752 0.81 146,732 0.45 7,020 8.90 4.57 08:1 152,822 0.53 144,755 0.04 8,067 10.19 5.28 08:2 154,264 0.95 146,165 0.09 8,099 19.61 5.25 08:3 155,399 0.96 146,029 -0.47 9,370 30.17 6.03 08:4 154,662 0.59 144,501 -1.52 10,161 44.74 6.57 Note: Data are in thousands.
ANALYSIS
The
national and regional labor market pictures that emerge in this report are not
a surprise. The economy is locked in the
worst business downturn since 1981-82, and faces the first real risk of a
genuine depression since the 1930s.
As
discussed in previous reports, the Great Depression was triggered by a collapse
of the banking system following the end of the stock market speculative bubble
in October 1929. The clever bankers of
the 1920’s became intertwined with the stock market bubble, and when the stock
market crashed, it took the banking sector and the national economy down as
well. The process took four years
(through 1933) to play out.
This
time the speculative bubble was in residential housing between 2003 and
2007. The clever bankers of our time
became intertwined with the real estate bubble, and when the bubble burst in
early 2007, it set off a process where the entire financial sector began to
collapse – but much more quickly.
That
is the extreme risk we face today – the first melt-down of the financial system
in over eighty years. But unlike the
1930’s, we do know what is happening and what needs to be done – fiscal
stimulus in whatever amount it takes. In
August 2008 we had the TARP stimulus package of $700 billion, half of which is
still unspent. In February 2009 we have
the Obama stimulus package of nearly $800 billion. Most analysts believe another stimulus round
will be necessary.
Even
with the unprecedented fiscal intervention in the economy, the business
situation is going to get worse over the next several months. The monthly data will continue to be
bleak. But there will be an end to the
recession and a turnaround in economic activity. In business cycle parlance, we are looking
for a “trough” to be followed by a “recovery”.
Many
analysts are now looking for the trough by late spring or early summer. The fiscal stimulus will begin to take hold,
and the financial system will finally become functional again (following the
process of bank failures, bank mergers, and reregulation). However, do not expect instant prosperity.
At
the trough, the national unemployment rate will be close to nine percent. And if the recovery is weak, labor market
conditions will continue to worsen and we may see double digit jobless rates by
the end of the year, before the labor markets begin to improve. And a major psychological factor is we will
officially remain in recession well into the recovery.
Looking
back at the business cycles of recent decades, we have precise months for peaks
and troughs. What we forget is that
these dates were announced well after the events. For example, the peak of the current business
cycle was December 2007, but this was not announced until December 2008, twelve
months later. The lag in identifying
troughs is even longer.
The
trough of the 1990-91 recession was March 1991, but it
was not identified until November 1992, some seventeen months later. The trough of the 2001 recession was November
2001, but it was not determined until July 2003, eighteen months later. So any trough in next few months will not be
officially marked until mid 2010!
There
are some points of note in the regional labor market picture. Tri-Cities construction employment was flat
in the fourth quarter, after several quarters of growth. Nationally, construction employment has been
dropping since early 2007. And despite
job losses, most of the regional employment gains from 2005 and 2006 have been
preserved. Compared to most other
regions, the employment situation in the Tri-Cities has been less affected by
the national recession.
Technical Note. This report was prepared in February 2009,
and is based upon the 2007 Benchmark of the Current Population
More
information. This report was
prepared by Dr. F. Steb Hipple, Professor of Economics, and Research Associate,
BBER. For more information, please
contact Dr. Hipple c/o Department of Economics and Finance, Box 70686,