April 2019 Employment: Down in Employment and in JOI

NE-JOIrace-0419-fewatured

The April employment report for Rhode Island was mixed.  Once again, the official unemployment rate dropped, to 3.7%, but once again, the reason was that more people stopped looking for work than lost their jobs.

The following chart illustrates the trend.  The blue line, showing employment, shows gradual loss, but the red line, showing the total size of the labor force, flopped.

RI-labor&unemployment-jan07-apr19

 

The point is made further by the following chart, which shows the official unemployment rate (blue line) in contrast with what the employment rate would have been had the labor force remained constant since the beginning of the Great Recession (red line).  The widening gap is a function of losing labor force at a faster pace than losing employment.  The unemployment rate suggested by the red line would be 7.3%.

RI-unemploymentrate-steadyLF-0107-0419

 

The following chart puts Rhode Island’s employment and labor force trends in comparison with those of Massachusetts and Connecticut.  In contrast with recent months, the Ocean State’s neighbors also saw declines in both lines, if only slightly.

RI-MA-CT-labor&unemployment-perc-jan07-apr19

 

Nationally, however, Rhode Island was not joined in misery.  Only fourteen states saw employment decreases, and as the following chart shows, Rhode Island remains one of only a few that haven’t regained all employment lost during the recession and, in fact, is among the bottom 3 by this measure.

US-employmentpercofpeak-0419

 

The bright spot of this month’s report is that jobs based in the state were up significantly.  How that number, represented by the light area in the following chart, could contrast so highly with the employment number, represented by the dark area, is not possible to say definitively.  Of course, the employment numbers, which are based on a survey, could be off.  However, the same result would also arise if people from other states were taking jobs in Rhode Island, or if more people were working multiple part-time jobs.  The latter has some evidence in the fact that new numbers used in the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) report show an increase in Rhode Islanders who say they are involuntarily working only part-time.

RI-employment&jobs-0107-0419

 

More reason for concern arises from the corresponding JOI report, which takes into account 12 data points, including these employment and jobs numbers as well as income, taxes, and welfare.  In the month of April, Rhode Island slipped back to 48th place in the country, from which it had escaped by displacing Louisiana in 2017.  That southern state has now returned RI to the position that it held for most of the decade.

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NE-JOIrace-0419




  • ShannonEntropy

    My fave local economist Leonard Lardaro has a lot to say to about these numbers

    First he thanks dog for …our good luck in living next to a strongly performing state, Massachusetts. I shudder to think
    of what our jobless rate would be if we didn’t have this employment source for Rhode Island residents.

    He sadly concludes with: I can no longer rule out the possibility that Rhode Island has entered the early stages
    of a recession.

    https://www.providencejournal.com/opinion/20190518/my-turn-leonard-lardaro-recession-with-low-unemployment-in-ri

    Not to toot my own horn but Yours Truly predicted a coming recession here a dozen or more threads or so here [ sorry too lazy to go dig the ref up ]

    Natch they do not call Economics “The Dismal Science” for no reason. I mean, we got members sitting on the Federal Reserve Board who base their monetary policy decisions on The Phillips Curve — a theory Milton Friedman effectively disproved *fifty years ago* !!

    But Lardaro is a much more pragmatic guy and he is rarely if ever wrong in his prognostications

    p.s. for you early-birds there will be a conjunction of the Moon & Saturn tomorrow, around 4 a.m. EDT [ the Moon rises ~ MN so catch it a few degrees off then if yer still up ]

    Jupiter will be just to the right of the Moon. The conjunction of the Moon & Jupiter was a few nights ago but it was raining all night then

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