Quarterly labor market report shows ‘impressive’ Tri-Cities employment growth

The Second Quarter labor market report from ETSU lined up with monthly CoreData preliminary reports showing an improving Tri-Cities employment and jobs creation market so far this year.

According to Dr. Steb Hipple’s report released today, “In the Tri-Cities metro area, second quarter employment growth was impressive.  The CPS put the year-to-year jump at 2.7% while the CES figure was 1.9%.  We last saw this level of increase in 2011.  The regional economy is now finally getting the long anticipated boost from the ongoing national economic expansion.

“Turning to the national economy, and according to the CPS household survey, employment in the United States is now at the highest level in history, exceeding the prerecession highpoint in 2007 by three million jobs.  However, as discussed in previous reports, the long-run growth rate of the U.S. population is one percent, and this carries over into a one percent annual growth in the potential labor force.  Since 2007, population growth has added eleven million potential workers to the economy, and eight million still remain outside of the “official” labor force numbers.  The official unemployment rate for the second quarter is 5.3%, but if the missing 8.3 million workers are included, then the effective unemployment rate is 9.9%.  At the present employment growth rate, we are looking at six to seven years before the eight million missing workers are finally added to the employment rolls and the economy is at true full employment.

“ Looking ahead, the national economy is expected to continue its overall expansion above the rate of population growth.  This will slowly add the eight million missing workers back into the productive labor force and reduce the number of families on welfare.  The effect on government budget deficits could be significant.  The regional economy also has a good outlook.  The Tri-Cities area is now clearly plugged into the national expansion, and as long as the U.S. economy grows, our regional economy will prosper.  Higher local incomes will provide the basis for continued retail growth.

“The second quarter labor market performance in the Tri-Cities was the best in several years, based on both the Current Population Survey (CPS) and the Current Employment Survey (CES).  According to the CPS household data, regional employment grew 2.7% in the spring period.  The CES payroll data puts employment growth at 1.9%.  This is the first time in three years that both indicators are telling the same story.

“ According to the Current Population Survey, employment levels jumped 2.7% to 218,921 – reversing three years of decline.  Unemployment fell 9.1% to 13,593 and the jobless rate for the metro area was 5.9% (compared to 6.6% in 2014 and 7.8% in 2013).  Responding to higher employment levels, the labor force expanded by 1.9% to 232,514.  Taken together, these CPS data show labor market strength.

“Over the past three years, the Current Employment Survey has been the more accurate measure of regional labor market conditions, and has shown steady if modest employment growth.  Among the twelve regional NAICS industry sectors, employment levels were higher in seven, lower in three, and unchanged in two (compared to higher in eight, lower in one, and unchanged in three sectors in the first quarter).  Job growth was led by leisure & hospitality, professional & business services, retail trade, education & health services, and manufacturing.  Smaller job gains were reported by government, and transport & utilities.  Small job losses occurred in construction, information services, and other services.  Employment was unchanged in wholesale trade and financial services.

“Reflecting regional conditions, all three cities saw significant increases in job levels during the second quarter.  After three years of declining (as measured by the CPS data), employment grew 3.6% in Johnson City, 2.9% in Kingsport, and 1.8% in Bristol.  Driven by job gains, unemployment fell in each city, reducing the unemployment rates to 5.6% in Bristol, 5.9% in Johnson City, and 5.9% in Kingsport.  The labor force grew in each urban labor market.  Taken together, these CPS data show labor market strength.

The full report and data can be found at http://faculty.etsu.edu/hipples/LF15q2.htm.

The June  CoreData report and charts can be found at https://donfenley.com/2015/07/27/tri-cities-labor-market-continues-positive-trend/

CoreData’s June report on local private sector wage increases can be found at https://donfenley.com/2015/07/28/kingsport-bristol-wages-increasing-at-brisk-pace/.

A full NETAR Market Pulse data report on the mid-year Tri-Cities economy can be found at http://www.netar.us/market-pulse-new/tri-cities-enters-second-half-of-2015-with-economic-tailwinds/

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