US Regional Unemployment: Concentrated ProblemsBy admin_45 in Blog
The latest (November) US-state level unemployment data is out, so let’s walk through the numbers.
#1: While the national unemployment rate is 6.7 percent, large swaths of the country (by land mass, if not population) are doing much better than that headline statistic:
- 17 states actually have unemployment rates of 5.0 percent or below.
- Between 3.0 – 4.0 pct: Nebraska, Vermont, South Dakota, Iowa and New Hampshire
- Between 4.0 – 5.0 pct: Utah, Alabama, Minnesota, Missouri, South Carolina, North Dakota, Idaho, Montana, Virginia, Indiana, Maine and Wisconsin
#2: Seven highly populated states (i.e., top 15-most populous) also have subaverage unemployment:
- Florida (3rd largest state by population): 6.4 percent
- Ohio (7th largest): 5.7 percent
- Georgia (8th largest): 5.7 percent
- North Carolina (9th largest): 6.2 percent
- Virginia (12th largest): 4.9 percent
- Washington State (13th largest): 6.0 percent
- Massachusetts (15th largest): 6.6 percent
#3: US joblessness is heavily concentrated in a handful of geographic areas:
Region #1: The NY-NJ-CT tristate area
- New York: 8.4 percent in November (NYC Unemployment of 12.1 percent)
- New Jersey: 10.2 percent
- Connecticut: 8.2 percent
Region #2: Los Angeles, CA metro area
- California: 8.2 percent in November
- Los Angeles: 10.6 percent
- Note: no other large CA metro area (San Francisco, San Diego, etc.) has seen unemployment over 10 percent since July 2020
Region #3: Tourism-heavy smaller states/areas:
- Nevada: 10.1 percent in November
- Hawaii: 10.1 percent
- Louisiana: 8.3 percent
- Washington DC: 7.5 percent
Region #4: Texas, although unlike the other areas mentioned here this was new in November:
- Texas unemployment has been generally better than the national numbers all year. The state’s April peak of 13.5 percent was lower than the US’ 14.7 percent, for example. Every month save September shows the Lone Star state at-or-below nationwide joblessness.
- November saw Texas unemployment spike from 6.9 percent in October to 8.1 percent, its largest divergence from the nationwide data since the pandemic began.
- While we do not yet have the November city-level unemployment data for Texas, we are working under the assumption that last month’s uptick in joblessness is state-wide and was caused by virus mitigation measures.
As for what we make of these patterns, 3 final points:
#1: With every passing month of unemployment data, it becomes ever clearer that the Pandemic Recession is more geographically concentrated than any US economic downturn we’ve ever seen. Fully a third of states (those 17 mentioned in point #1) are in reasonable shape, even accounting for the obvious issue of declining labor force participation rates.
#2: The areas of the US that are most certainly “not OK” – tristate NY/NJ/CT, Los Angeles, tourism-heavy small states – will not stage a meaningful labor market recovery until vaccine distribution hits critical mass. Only then will office workers begin to return to metro centers and tourists start to travel again.
#3: Texas is a cautionary tale about what can happen to a local economy that was doing well but then needs to change course to address a virus outbreak. We need to keep that case study in mind as we consider where US unemployment may go over the next few months.
State-level unemployment: https://www.bls.gov/web/laus/laumstrk.htm