ETSU
Bureau of Business and Economic Research
(This report is based on revised benchmark data. Refer to the note at the
end of the report.)
THE METROPOLITAN AREA (CSA)
After a weak fourth quarter (based on the revised data), the Tri-Cities
regional labor market imploded during the first quarter of 2009. Driven by large losses in manufacturing and
construction, employment fell a staggering 3.6% to 223,926. This is a loss of 8,303 jobs compared to the
same period in 2008, and is much larger than the loss of 407 jobs in the fourth
quarter. Unemployment increased by
nearly two-thirds to 21,023 on a year-to-year basis. The growth in joblessness was 8,366, matching
the decrease in employment levels. The
drastic decline in employment has driven the casual job seekers out of the
labor market who had inflated the unemployment ranks during 2008. (In the fourth quarter unemployment had
increased by 3,605 compared to a job decline of only 407.) The jobless rate for the Tri-Cities area rose
to 8.6%, compared to only 5.2% a year ago.
In the fourteen NAICS industry sectors, employment levels were higher in
four, lower in nine, and unchanged in one (compared to three, seven, and three
in the fourth quarter). Job growth occurred in education & health, professional &
business services, government, and retail trade. Large employment declines were reported by
durable manufacturing, construction, and nondurable manufacturing. Smaller job losses occurred in wholesale
trade, other services, information, finance, leisure & hospitality, and
transport & utilities. Employment in
the small mining sector was unchanged.
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 236,077 -0.41 223,032 -0.11 13,044 -5.22 5.53
2005 237,273 0.51 224,768 0.78 12,506 -4.13 5.27
2006 241,502 1.78 230,068 2.36 11,434 -8.57 4.73
2007 241,720 0.09 230,988 0.40 10,732 -6.15 4.44
2008 246,607 2.02 232,706 0.74 13,901 29.53 5.64
07:1 240,990 0.72 230,021 1.39 10,970 -11.48 4.55
07:2 240,182 -0.40 230,277 0.33 9,905 -14.80 4.12
07:3 241,822 -0.22 231,144 0.04 10,678 -5.60 4.42
07:4 243,885 0.26 232,511 -0.14 11,374 9.27 4.66
08:1 244,886 1.62 232,229 0.96 12,657 15.38 5.17
08:2 246,803 2.76 233,485 1.39 13,319 34.46 5.40
08:3 247,668 2.42 233,017 0.81 14,650 37.20 5.92
08:4 247,073 1.31 232,094 -0.18 14,979 31.70 6.06
09:1 244,949 0.03 223,926 -3.58 21,023 66.10 8.58
THE
TRI-CITIES
All
of the three cities were hit by the dismal labor market situation during the
first quarter. The largest job losses were
in Johnson City where employment was down 3.7%, followed by 3.5% in Kingsport,
and 3.3% in Bristol. The largest
unemployment increase was in Bristol where jobless ranks grew 79%, followed by
62% in Kingsport, and 55% in Johnson City.
At 8.0%, Kingsport had the lowest unemployment rate, followed by 8.3% in
Johnson City, and 8.5% in Bristol. The
jobless rate for the metro area was higher at 8.6%, since the highest
unemployment rates occurred in the suburban counties rather than the cities.
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 27,188 -1.82 25,636 -1.67 1,552 -4.20 5.71
2005 27,171 -0.06 25,751 0.45 1,420 -8.48 5.23
2006 27,671 1.84 26,409 2.56 1,262 -11.14 4.56
2007 27,572 -0.36 26,356 -0.20 1,215 -3.69 4.41
2008 28,133 2.04 26,626 1.02 1,507 24.02 5.36
07:1 27,503 -0.04 26,266 0.53 1,237 -10.65 4.50
07:2 27,442 -0.93 26,296 -0.36 1,146 -12.44 4.18
07:3 27,635 -0.66 26,436 -0.58 1,199 -2.41 4.34
07:4 27,708 0.20 26,428 -0.37 1,280 13.63 4.62
08:1 27,906 1.47 26,575 1.18 1,331 7.59 4.77
08:2 28,180 2.69 26,754 1.74 1,426 24.43 5.06
08:3 28,310 2.45 26,698 0.99 1,612 34.50 5.70
08:4 28,137 1.55 26,476 0.18 1,660 29.72 5.90
09:1 28,015 0.39 25,638 -3.53 2,377 78.90 8.48
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 54,097 1.69 51,196 1.98 2,901 -3.17 5.36
2005 54,598 0.91 51,749 1.08 2,840 -2.12 5.20
2006 55,544 1.75 52,943 2.31 2,601 -8.43 4.68
2007 56,123 1.04 53,628 1.29 2,496 -4.03 4.45
2008 57,112 1.76 53,807 0.33 3,305 32.43 5.79
07:1 55,834 1.90 53,360 2.67 2,474 -12.42 4.43
07:2 55,713 0.62 53,392 1.36 2,321 -13.81 4.17
07:3 55,987 0.92 53,479 0.98 2,507 -0.34 4.48
07:4 56,959 0.75 54,278 0.20 2,681 13.19 4.71
08:1 56,746 1.63 53,704 0.64 3,042 22.94 5.36
08:2 57,055 2.41 53,866 0.89 3,189 37.39 5.59
08:3 57,221 2.20 53,763 0.53 3,458 37.90 6.04
08:4 57,427 0.82 53,895 -0.71 3,533 31.77 6.15
09:1 56,439 -0.54 51,734 -3.67 4,705 54.68 8.34
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 45,093 -1.76 42,532 -1.57 2,562 -4.85 5.68
2005 45,209 0.26 42,783 0.59 2,426 -5.29 5.37
2006 46,036 1.83 43,860 2.52 2,176 -10.31 4.73
2007 45,688 -0.75 43,758 -0.23 1,931 -11.26 4.23
2008 46,722 2.26 44,187 0.98 2,535 31.29 5.43
07:1 45,485 -0.19 43,499 0.57 1,985 -14.31 4.36
07:2 45,508 -1.34 43,706 -0.37 1,802 -20.16 3.96
07:3 45,847 -1.13 43,874 -0.62 1,972 -11.21 4.30
07:4 45,914 -0.35 43,951 -0.49 1,963 2.91 4.28
08:1 46,259 1.70 43,982 1.11 2,277 14.70 4.92
08:2 46,896 3.05 44,442 1.64 2,474 37.27 5.28
08:3 47,065 2.65 44,339 1.06 2,726 38.20 5.79
08:4 46,670 1.65 44,007 0.13 2,663 35.63 5.71
09:1 46,212 -0.10 42,509 -3.35 3,703 62.62 8.01
THE
UNITED STATES
At
the national level, the recession became even more severe during the winter
months. Employment fell by 3.2% to 140.1
million, a loss of over 4.6 million jobs compared to 2008. (In the previous
quarter the loss was 1.5% or 2.2 million jobs).
Unemployment was higher for the seventh quarter in a row, jumping by
two-thirds to 13.5 million – an increase of 4.5 million. As in the Tri-Cities, casual job seekers have
now withdrawn from the U.S. labor market.
The first quarter unemployment rate was 8.8%, compared to 5.3% a year
ago.
In
the fourteen NAICS industry sectors, employment levels were higher in three,
and lower in eleven (compared to four and ten in the fourth quarter). Employment was up in only education &
health, government, and mining. Large
job declines were reported in professional & business services, durable
manufacturing, construction, and retail trade.
Smaller employment decreases were in leisure & hospitality, finance,
nondurable manufacturing, wholesale trade, transport & utilities, 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 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 09:1 153,659 0.55 140,125 -3.20 13,534 67.77 8.81 Note: Data are in thousands.
ANALYSIS
During
the first quarter, the recession continued to intensify in the nation, and has
now spread to the region. On a year-to-year
basis, unemployment jumped 67% in the United States and 63% in the
Tri-Cities. Put another way, for each
ten workers out of a job in early 2008, there are now sixteen workers
unemployed in early 2009. The employment
figures match the jobless figures – some 4.6 million jobs lost in the nation,
and 224,000 jobs lost in the region.
As
grim as this labor market situation has become, it is not unexpected. The economy is entrapped in the worst
recession since the 1981-82 downturn. The recession is now seventeen months old and
counting, while a normal recession typically lasts only nine or ten
months. Business conditions will become
worse before they get better.
So
the bad news is that we are facing more bad news. The good news is that the prospect of another
Great Depression is off the table, and the end of the downturn may be near. When we look at the detailed data in the
labor market picture, a significant change is occurring. While job losses continue to pile up, the
monthly job losses are getting smaller and this is the first step to an end of
the decline in employment.
There
are other straws in the wind – retail activity shows signs of stabilizing and
recovering, inflation remains low, and the economies of our major trading
partners in East Asia have actually turned around and begun to expand. To paraphrase the words of the economists
advising President Herbert Hoover, the economy will soon turn the corner.
The
most significant news in this report is the labor market downturn in the area
economy. The year 2008 saw regional
employment increase by 0.7%, compared to 0.4% in 2007. Service sector employment held up,
construction employment was higher, and the decline in jobs in the manufacturing
sectors was modest. This regional picture
began to change in the fourth quarter, and the downward spiral accelerated in
the first quarter.
During
the January to March period, very large job losses occurred in construction and
manufacturing. Notably, employment in
the service sectors continued to hold up, thus preserving the main job gains of
the preceding three years. Overall, the
local economy is now feeling the full impact of the recession.
What
is the future going to look like? The
first thing stress is that regional business conditions are now linked to the
national business cycle, so any recovery in the U.S. economy will also lead to
a recovery in the Tri-Cities. So the
question becomes when will the recession end (a “trough” in the business cycle)
and when will the recovery begin?
Many
analysts are looking for a trough in the next few months. But as mentioned in the previous labor market
report, we will not be able to date the trough until we are well past that
point in time. There will be a sense of
economic recovery well before the “experts” identify the exact month of the low
point in economic activity.
So
by the third quarter, the U.S. economy could well be growing again. But will the growth be strong or weak? This is a critical question. The recovery phases following the 1990-91 and
2001 recessions were very weak, and unemployment continued to increase for over
a year after the recovery had begun. That
is the pattern most economists expect to occur again. If so, the jobless rate will continue to rise
into 2010, and more than ten percent of the labor force will be out of work.
But
there is another factor at work. To
offset the severity of the recession and the collapse of the financial system,
the federal government and the central bank have provided a level of fiscal and
monetary stimulus unseen since World War II.
And the wartime results of that stimulus was enough to lift the economy
out of the Great Depression and to levels of output, employment, and low
unemployment never seen before (or since).
And that dramatic change in economic conditions occurred within a span
of months. So the “sleeper” in the economic
outlook is the impact of the extraordinary fiscal and monetary stimulus once it
begins to take hold.
New Benchmark Data. This labor market report is based on the new
2008 Benchmark of the Current Population Survey, U.S. Bureau of Labor
Statistics. Each year, the BLS issues
revised data for the labor markets in counties and cities. The revised employment figures for the Tri-Cities
show lower growth in 2007, but employment gains (rather than a loss) in
2008. The unemployment revisions are
minor.
Technical Note. This report was prepared in May 2009, and is
based upon the 2008 benchmark of the Current Population Survey, U.S. Department
of Labor. The labor markets for
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,