October 2014 Employment: The Mysteries of Stagnation

As I’ve written in my monthly employment post on RIFreedom.org, the mystery of October’s employment numbers for Rhode Island is that jobs and labor force are down, while employment is up.

Some have suggested that means Rhode Islanders are finding work in Massachusetts or Connecticut, but the numbers don’t really support that conclusion.  Massachusetts and Connecticut had 4,800 more jobs available in October, than September, but they had 25,285 more people saying that they were employed.  That doesn’t leave any holes for Rhode Islanders to fill.

A partial explanation may involve the difference between what the metrics measure.  Employment data would include people who are self-employed, even if it’s only finding random things to bring in some money.  Jobs data only includes people who work for somebody else.

This week, I bought a hand-made-to-order pillow from a friend who hasn’t been able to find work for the better part of a year.  Depending how the question was asked, she might tell an interviewer that she had managed to work during the period, based on that pillow, but it’s hardly a sign of a growing economy.

The following basic chart shows that Rhode Island employment has been basically flat for a few months, with labor force drifting down and employment drifting up.

RI-laborforceandemp-0107-1014

Adding in Rhode Island’s two neighboring states turns this mildly saddening picture into a downright depressing one.  Both Massachusetts and Connecticut saw large gains in both labor force and employment.  Some high-profile corporate losses (like CVS’s decision to set up a Digital Innovation Lab in Boston, rather than Rhode Island, and Rhode Island Novelty’s move to Fall River), although they don’t affect this employment report, fit painfully with this picture, indicating that Rhode Island is doing something seriously wrong.

RI-MA-CT-labor&unemployment-perc-jan07-oct14

The monthly distance-from-peak chart doesn’t show trends over time, but it does illustrate that Rhode Island is still at the back of the pack when it comes to recovering employment from its economic peak.  If (as I expect) the employment data is revised downward substantially in January, this picture will only get worse.

US-employmentpercofpeak-1014

The real peculiarity comes with the final chart.  Normally, it’s the employment number (the higher area) that shows erratic shifts.  In this case, it’s the jobs numbers.  It’s possible that the Bureau of Labor Statistics will just smooth these numbers out, when it revises them, but it’s also possible that small companies are beginning to fall by the wayside.  The fact that the state Department of Labor and Training cites landscaping services and employment services as areas of significant loss could be an indication that Rhode Island is facing broad decline that doesn’t require any of the mass layoffs that would be easy to identify.

RI-employment&jobs-0107-1014

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