Wednesday, August 04, 2010

Great Recession Recovery Geography

The same unemployment rate in two states can tell a vastly different story depending on the underlying numbers. Ryan Avent compares Texas and New York:

At present, Texas and New York have identical unemployment rates, but in recent months labour force and employment growth have been far stronger in the latter than in the former. There is something to be said (quite a lot, actually) for a state economy with low volatility. But if a surge in growth in other areas drains some of the migrant flow to Texas, its economic model could face challenges.

Yes, there is a snippet of news that the local unemployment rate has ticked up to 8.1%. Still well below the US rate at 9.7%. The bigger negative factoid is that unemployment count in the region is an even 100K. Round numbers always catch my eye, but that is a bad number for sure. That is all bad, but the weather may have both local and national numbers a bit off of trend for a couple months.

BUT... what nobody seems to have noticed, not even the state itself, and what is something I need to think about a lot more... the county for the region's seasonally adjusted labor force in January came in at 1,240,100. If that is a robust number (by that I mean it does not get revised too much in coming months), I think it is the single largest count for the labor force in the region in the last 40 years... which is all I keep track of. I am pretty sure that would make it the single largest labor force count in the region's history.

Like a drop in population, an upward bump in unemployment rate makes for sensational headlines. Gloom and doom is on the advance. Meanwhile, total labor force is standing at half-a-century highs. It's all relative, not lipstick on a pig.

I bring all this up regarding the latest news from PittsburghTODAY:

Benchmark avg1,549,9641,533,173-1.08%
St. Louis1,470,7111,453,176-1.19%
Kansas City1,067,2291,041,014-2.46%

The data from the benchmark regions paints a different picture of recovery. I've intentionally left out the unemployment rates. Given the sluggish job rebound (if one can even call it that), I think the labor force numbers are more telling. As you can see, Pittsburgh is still setting records as the labor force continues to grow. That's likely a result of inmigration. As for the other regions, I don't know their labor force histories. Is Charlotte returning to pre-recession highs or are people still moving there?

I also wonder about the ability of the unemployed to leave Pittsburgh. Given the somewhat rosy real estate picture, I would think that people could move. I doubt the same geographic immobility problem plaguing most of the country is a problem in Southwestern PA. Those sticking around are likely optimistic about their prospects and/or muddling through the tough times thanks to a strong social network.

Lastly, I note that Pittsburgh leads the benchmark cohort in job growth over the same period. The small gains are nothing to celebrate, but at least it isn't bad news. Overall, I'd say Pittsburgh, Boston, and Charlotte are leading the way for recovery. You can take a gander at the data yourself and draw your own conclusions.

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