SC State Unemployment March 2011
Issue
I do not review these data every month because unemployment data is more useful when the analysis focuses on the labor trends. Unfortunately, the Post and Courier is more interested in reporting hype and misinformation than telling us what the data actually says. This is a shame since they are wasting people’s time, including economist Frank Hefner’s, who I am sure pointed out what I am about to say, based on his comments:
“College of Charleston economist Frank Hefner said the unemployment rate does not tell the whole story. The recovery in the past year has been slow, he said, and fewer people are in the workforce, such as those individuals who are discouraged and no longer looking for work.”
The bottom line, which Dr. Hefner eluded to, is there is no reason to be “elated” about in this jobs picture!
Incorrect Analysis: Again
Jezzz. I constantly feel that I need to correct the Post and Courier on this point! Mixing data sets to fit the story misleads the reader. Adjusted and unadjusted unemployment numbers are two completely different data processes – apples and oranges. State adjusted employment for the month of March increased by 3,746. A little different than the 15,700 noted in the article! (PDF)
Unemployment Analysis: Current Employment Statistics Benchmark
This analysis uses data from the Bureau of Labor Statistics. Stated above, South Carolina gained 3,746 jobs in March. The major sticking point, however, is the labor force dropped by 3,199 persons from February to March, and by almost 18,000 from March 2010. Three numbers come together to create the unemployment rate: labor force (LF), employment and unemployment. It is not possible to adjust one with out adjusting one of the others. If we assume a LF scenario that is neither growing or declining – very conservative considering South Carolina’s population is growing – we see the unemployment rate remained flat at 10 percent from February 2011 to March 2011. See PDF.
Regardless of the meager employment growth, some is better than none! However, employment changes by the minute in the state. So what does the final employment picture look like for March? The Current Employment Statistics program (adjusted) provides clues to the result of all those changes from month to month and year to year. These data explain why an accounting professional the Post and Courier interviewed may be challenged in finding employment. The business services industry, accountants included, actually declined in employment from the previous month. Even so, over the past year there has been an improvement of almost 20,000 jobs in this major sector. Unfortunately, 94 percent are not in the accounting field! Where was the growth? It turns out it is right where it has been and should be this time of year, in leisure and hospitality.
Conclusion
It appears that the current recovery, which is already lagging significantly behind other recoveries, is going to be slow at best. With an increase in commodities prices (essentially a excise tax on disposable income – i.e. fuel) and the loss of 10,500 jobs in government employment this past year, “elated” would not describe the way many people feel about the current state of economy.
