Tri-Cities job creation up in February, unemployment rate at 8-year low but……

Nonfarm job creation in the Tri-Cities was up for the 11th straight month in February, and the seven-county region’s unemployment rate dropped to a preliminary, non-adjusted eight-year low of 4.9%. You have to go back to April 2008 when the rate was 4.6% for a lower rate.

That’s good news, but a deeper dive into the number takes some of the wow factor off those numbers.

Feb jobsAlthough the nonfarm year-to-year job total is improving it’s back below the pre-recession benchmark. Totals pushed past that benchmark for the first time in November and December before sliding back. That’s not an immediate concern because it fits the normal ebb and flow pattern. A better indicator will come in the second quarter.

And when you compare February’s employment and the labor force with those from April 2008 you see the were 18,982 more people with jobs in 2008. And there were 19,263 more people in the labor force ranks.  February’s unemployment was the lowest in eight years, but there are fewer people with jobs, and the labor force is smaller.

There are  several reasons for the disparity in those employment numbers. Like the rest of the nation, our population is aging. Many workers have retired – or been retired – since the pre-recession days, and employers have not replaced many of them. Technology has also taken a bite out of jobs, so employers are doing more with fewer workers. And, some workers who were laid off haven’t been able to adjust the growing demand for new skills, or lower wages, have simply dropped out of the labor force.

Since February last year, the year-to-year growth rate for nonfarm jobs and employment has been positive for all but one month.  March’s jobs report was lower. Since then employment increased faster than the jobs rate every month except January.

Seeing those rates telling the same labor market story is important because both of the reports have strong and weak points.

The payroll report is the large and best measure of the labor market. It reports the number of people who have jobs and in which labor sector, the hours they worked and how much they were paid. It’s a Metropolitan Statistical Area study, so it offers no information about jobs on the county or city level. It also overlooks many self-employed or contract workers who have a growing share of today’s labor market.

The household U3 report is the smaller study. Some economists – like retired  ETSU economics professor and research associate for the Bureau of Business and Labor Research,  Steb Hipple – call it the most worthless piece of data collected by the federal government.

Still the U3 report is what’s used to calculate the unemployment rate which is the most popular public and media labor market metric. It’s also broken down to the county and cities with 25,000 or more population levels, but its focus is on who has a job – not where the job is located. For instance, a Bristol resident who works in Johnson City is reported in Bristol’s employment. One of its major weaknesses is how it classified people as employed. For instance, a part-time worker working just a few hours a week is classified just like a full-time worker. It also does not differentiate between voluntarily part-time workers and those who would rather be working full-time.

There is one level of the household report that does break out those part-time workers.  That U6 report is considered by many as a more accurate reflection of unemployment, but it’s a national-level report. February’s U6 rate was 9.7% – the lowest since May 2008. The February U.S. U3 rate was 5.2%

Here’s how February nonfarm jobs and employment numbers look

TRI-CITIES,  4.9% down 0.4%

Nonfarm jobs – About 200,000, up 3,100 from February last year.

Employment – 215,824, up 2,651 from last year.

JOHNSON CITY MSA – 5%, down 0.5%

Nonfarm jobs – 78,500, up 900 from last year.

Employment – 85,019, up 1,871 from last year

KINGSPORT-BRISTOL MSA – 4.8%, down 0.3%

Nonfarm jobs – 121,500 – up 2,200 from last year

Employment – 131,500, up 779 from last year

BRISTOL – 5.1%, down 0.4%

Employment – 11,100 up 252 from last year

Bristol employment lags its pre-recession benchmark by 933.

JOHNSON CITY – 4.3%, down 0.5%

Employment – 29,410, up 927 from last year

Bristol employment lags its pre-recession benchmark by 469

KINGSPORT – 5.1%, down 0.2%

Employment – 21,560, up 430 from last year.

Kingsport employment exceeds pre-recession benchmark by 3,606

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