February 2017 Employment: The Annual False Boom Begins?

RI-MA-CT-labor&unemployment-perc-jan07-feb17-featured

Given the Bureau of Labor Statistics’ (BLS’) annual revision of employment data for January and earlier, the February numbers were released in rapid succession.  The new numbers do look positive, but that’s not uncommon.  Every single year, Rhode Island’s employment numbers show a boom that has no supporting evidence elsewhere in the economy and that is largely wiped away with the following year’s revision.

The first chart shows the labor force (red line) and employment (blue line) numbers, and as stated above, they indicate a significant leap to kick off the year.  Such false leaps happen every year, though, only varying in the month at which they start.

RI-labor&unemployment-jan07-feb17

 

Because employment increased in a greater amount than the labor force, the unemployment rate dropped.  That is reflected both in the actual unemployment rate (blue line on the next chart) and in what the rate would have been if labor force had never collapsed after the recession (red line), although it would still be 8.2%.

RI-unemploymentrate-steadyLF-0107-0217

 

Not only is this jump expected every year, but the employment-and-labor-force chart that includes Massachusetts and Connecticut shows that it’s at least a regional phenomenon, with Rhode Island still unacceptably far behind.

RI-MA-CT-labor&unemployment-perc-jan07-feb17

 

Similarly, Rhode Island’s comparison nationally, when it comes to regaining lost employment since states’ peaks, didn’t change much, although most states moved up some.

US-employmentpercofpeak-0217

 

As for RI-based jobs (the lighter area of the following chart), the increase was not out of line with the general up-and-down trend, averaging out to slow growth.

RI-employment&jobs-0107-0217

 

Lastly, our monthly turn to the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI) results for February reveals little motion at all throughout New England.  One notable point, with JOI, is that state and local taxes decreased by about $5 million in RI.  That change had a mildly positive effect on the state’s JOI score, but it does suggest that the government’s projections for future revenue may be overly optimistic, and it is certainly in keeping with the Ocean State’s stagnant economy and employment situation.  After all, if people aren’t working, they aren’t paying income tax, and they’re likely to be scaling back purchases, hitting sales taxes, too.

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