Friday, March 10, 2017

Jobs Update: Negative Trend Continues

The Bureau of Labor Statistics has released county-level employment data for the third quarter of 2016. Before we take a look at it, here is what I concluded when I reported on this data for the first two quarters of 2016

a) We depend heavily on government in almost every county;
b) We are losing private-sector jobs in a way that is totally unsustainable; and
c) The minerals industry is only partly responsible for that job loss.

With the exception of government employment - which I will report on separately in a later article - the picture I painted back in February is, generally, still valid.
If anything, county-level data reinforce the picture that our economic crisis is here to stay. Even though these job numbers are from last year, they do tell us a great deal about what we can expect for 2017: a stabilization of the labor market back in late 2016 would suggest that we have reached the bottom of the economic crisis; a continued decline in employment suggests that 2017 will be at least as bad as 2016. 

Overall, there are weak signs of a stabilization, suggesting that 2017 will fall somewhere between "about the same as 2016" and "somewhat worse". I have mentioned this before, especially with reference to the minerals industry: statewide, the loss in minerals jobs has been replaced with a new, lower-level stability. The same is not yet true for non-minerals private jobs, but the stabilization in the minerals industry suggests a revision of forecasts of the state budget deficit. Those who claim it will exceed $700 million as we pass 2020 are going to be proven wrong. 

The $700-million forecast remains in place, though, until we see some structural changes to state spending. 

Reinforcing my prediction of the state budget deficit, and of a stabilization of the Wyoming economy (which does not mean recovery - only an end to the decline), is a somewhat new trend in county-level employment data. Up through the first two quarters of 2016 the private-sector jobs trend was clearly negative; today, the picture is a bit more complex at the county level. We still have a negative private jobs trend in 17 of the 21 counties for which adequate data is available (for unknown reasons, Carbon and Niobrara consistently fail to deliver reliable numbers) but there are some nuances in the latest numbers that were not there before. 

On the negative side, the trend of declining private-sector employment is accelerating in six counties: Campbell, Converse, Crook, Goshen, Sheridan and Washakie. For the record, there is no correlation in these counties between private jobs generally and minerals jobs. In Campbell and Converse, where minerals jobs represent 28 percent of all private jobs, the trend in minerals employment is steady. The same is true for Crook where almost one in five private-sector jobs are in minerals. In Goshen, Sheridan and Washakie, minerals jobs account for 5-8 percent of the private sector, so they really do not influence the general jobs trend very much.

Six counties still have a steadily negative employment trend: in Fremont, Laramie, Natrona, Park, Sweetwater and Weston, there are fewer private jobs in the third quarter of 2016 than in the same quarter of 2015, but the decline in employment is neither tapering off nor getting worse. As for minerals jobs, once again there is a big spread in terms of their influence on the private sector generally. One in four private jobs in Sweetwater County are minerals jobs, while in Fremont they only account for six percent.

The minerals-jobs situation in Natrona is bad (hardly surprising). In two years their share of private employment has declined by half, from 13 percent to less than seven percent. 

In Weston, the minerals-jobs situation is breaking a statewide trend: in the first two quarters of 2016 the county saw an improvement in minerals employment; in the third quarter that trend has suddenly turned negative. 

Of the remaining counties with reliable data, Big Horn, Johnson, Sublette and Uinta have seen their negative employment trends weaken. This means that they are no longer on a steady path of losing private-sector jobs, but seem to be at a point where those who still have a job in the private sector can be more confident about their future.

In Uinta, it looks like the non-minerals private sector is actually improving while the county is seeing a steadily negative minerals employment trend. This merits further investigation. It would be interesting to see what private industries are actually doing better in Uinta. 

Platte County has a volatile jobs trend that is generally on the negative side. Minerals employment, about ten percent of total private employment, is trending upward but at a weaker rate. 

In Albany, Lincoln and Teton private-sector employment continues to trend upward. Hot Springs has seen its negative private employment trend switch from negative to positive. It looks like the entire upturn is attributable to minerals: in September 2016, minerals employment was actually 16 percent higher than in September 2015, with the actual jobs added slightly exceeding the increase in private-sector employment generally.

In conclusion, the overall jobs trend in the private sector in Wyoming is still weak, but showing signs of stabilizing at a weaker "new normal". Next week I will add the latest numbers on government jobs.


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