Mid-year report: Labor economy slowly moving toward recovery to pre-recession Tri-Cities jobs level


The Tri-Cities labor market slipped into its seasonal summer slump in June still flexing its slow-growth muscles.

June’s report holds some critical clues to not only the progress and durability of the region’s economic recovery but how that recovery is restructuring the local labor market and economy. New job creation in the seven-county Tri-Cities Consolidated Statistical Area (CSA) has been slowing for three years. It peaked in 2106 with the addition of 1,500 new nonfarm jobs. In 2017 it slipped to 800 new jobs. Last year growth was 500 new jobs.

Preliminary, non-adjusted nonfarm job totals from the Bureau of Labor Management’s (BLM) payroll report show jobs declined from May’s total. That’s normal. It will continue until August. The telling data is benchmarking against the job total for June last year, the first six months of last year and the first half of 2008 – the region’s pre-recession benchmark.

A comparison of the raw numbers shows June’s nonfarm job total was 3,400 better than June last year. It was also the fifth straight month nonfarm jobs exceeded the monthly pre-recession benchmark. If job creation continues at its current pace and there are not big job losses 2019 will be the year the region’s nonfarm job total recovers to the pre-recession territory.

WHERE THE JOBS ARE AT MID-YEAR

CLICKING ON A CHART RENDERS A LARGER VERSION.

The region’s Education and Health Care Services Sector was the top jobs provider during the first half of 2019. The sector had seen some contraction – partially due to health care consolidation.  This comparison uses the six-month average for each sector to take some of the noise out of the month-over-month churn of job gains and losses.

Although the Government Sector has been stagnant, it was the No. 2 jobs provider during the first six months of 2019. State government had the strongest jobs growth, up 233 from the first half of last year. Local government declined by 133 jobs, and there were 17 fewer federal government jobs. The region’s large government sector acts as a buffer to downturns and boosts the lack-luster private sector average wage – the lowest in the state.

Manufacturing’s job performance has been brittle but did add 167 new jobs. It has declined from its heyday as the region’s top job provider to the No. 3 slot.

The Retail Sector continues as a major employer, but Leisure and Hospitality and Professional and Business Services have a faster growth rate. Retail has added 167 new jobs so far this year, while Leisure and Hospital added 1,150 and Professional and Business Services added 1,050.

The biggest job loss was in the Mining, Logging, and Construction Sector, down 283 jobs.

The Information Sector also continued to contract with the loss of 133 jobs.

JOBS RESTRUCTURING

When labor sector six-month averages are compared to the first half of 2008 – the year before the Great Recession hit the local economy – it’s a stark illustration of the transformation of a manufacturing economy to the service economy.

The largest sector growth for the first half of this year came in Professional and Business Services. They are service jobs but don’t mistake all of the sectors as one of the low-paying jobs. It includes lawyers, computer software engineers, and accountants. There are also jobs in the sector that don’t require degrees.

Leisure and Hospitality; Education and Health Services, Other Services and State government jobs have also posted strong growth.

Manufacturing’s loss of 4,600, the loss of over 3,000 Mining, Logging and Construction jobs are a testament to the decline of the goods-producing economy.

Although the Information Sector is the region’s smallest job sector, it has seen the third biggest job loss in the restructuring. Most of the losses came from staff reduction in the region’s news industries and services.

EMPLOYMENT

June’s unemployment rate for the region rate was 4.3%, up 1% from May. It and rates for the region’s two metro areas have been at record-low levels for over a year. These low rates are a reflection employment gains and a labor market recovery that has pulled workers off the sideline and into the market.

The labor force posted a small decline from May’s total while employment – like nonfarm jobs – moved into the summer slump with a 7,155 decline from May. Employment – like the jobs county – is growing, but the growth rate is slowing. Employment posted strong gains in 2016 and 2017. Last year was another growth year, but the growth rate dropped a little more than a half. Still – as illustrated by the chart – employment performance is stronger this year than it has been in previous years.

LABOR FORCE

So far this year, the region’s labor force has outperformed both the jobs creation and employment components. The recovering jobs market has pulled many workers off the sidelines, and aging workers are staying on the job longer. The big question mark is female workers’ participation. Nationwide the share of working women in the 25 to 54 age group declined to 75% in May after hitting a decade-high of 76% in January. While that drill-down level is not available on the local level, the women workers’ share of the full-time workforce has declined to 42.5% in the three-county Johnson City Metropolitan Statistical Area (MSA) while it is slowly increasing to 43.2% in the four-county Kingsport-Bristol MSA.

If labor-force participation by women has peaked, it does not bode well for the overall full-time participation rate. In general, women are some of the better-educated workers, and while they still claim less wage than their male counterparts, they are getting a larger share of the better-paying jobs.

Currently, it does not appear that women are holding back from the labor force to start families since the local fertility rate is lower than it is statewide. A major headwind for working women and families with children is the cost of childcare.

The local labor force participation rate continues to be lower than the national and state averages. A primary driver of that situation is the region’s aging trend. Back of the envelope calculations put the number of local residents turning 65 at about 28 a day. And while an increasing number of the folks are staying in or returning to the labor force, they face age discrimination and underemployment.

Data Sources for this report include the Bureau of Labor Statistics and the Census Bureau.

 

 

 

 

 

 



Categories: LABOR MARKET

1 reply

  1. Excellent writing Don. 👍

    Sent from Jerry Petzoldt iPhone 423.677.2486

    >

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