Magazine article Economic Trends

Employment in the Fourth District

Magazine article Economic Trends

Employment in the Fourth District

Article excerpt

Kentucky reported the Fourth District's lowest seasonally adjusted unemployment rate for May (5.3%), while rates in Ohio (5,8%) and Pennsylvania (5,7%) were the same as--or slightly lower than--the U.S. average of 5.8%. West Virginia registered an unemployment rate of 6.2% in May.

Kentucky is the only state in the District that did not report a year-over-year increase (its current unemployment rate is the same as a year ago), Ohio posted the largest increase (1.6 percentage points), followed by Pennsylvania (1.3 percentage points). West Virginia reported an increase of 1.1 percentage points for the year ending May 2002.

Kentucky's strong labor force performance compared with the other District states in the last six months contrasts with its abysmal performance from June 2000 to July 2001. During that period, its unemployment rate rose from 4.0% to 5.8%, and for eight consecutive months beginning with November 2000, the labor force shrank while the number of unemployed in the state grew.

During the first four months of 2002, Ohio reported a considerably larger average monthly increase in the number of unemployed than did other District states. In May, the number of unemployed persons in the state (345,100) fell from the previous month for the first time since March 2001, but this probably results from a technicality--the elimination of "discouraged workers" from the labor force. These workers are not counted as part of the labor force if they have not interviewed for a job within four weeks of the survey date.

Year-over-year, Kentucky is the only state in the District to report jobs growth; it posted an increase of 14,500 jobs--0.7% of its total non-farm employment. Ohio lost 51,600 jobs (0.9%), and Pennsylvania lost 66,700 (1.2%). West Virginia posted a loss of 5,700 jobs, roughly 0.7% of its total workforce.

In every state in the District, the goods-producing sector (comprising the mining, construction, and manufacturing industries) registered year-over-year losses. Not surprisingly, manufacturing suffered the heaviest losses (the same was true in all 50 states). In Pennsylvania, the goods-producing sector's entire job loss resulted from heavy annual losses in manufacturing (53,700 jobs). The exact causes of manufacturing employment losses in District states are not yet identified, but state experts have suggested that attrition, foreign competition, and technological replacement all figured significantly in the downsizing of the manufacturing workforce within each state.

Although it fared far better than the goods-producing sector in the most recent recession, the service-producing sector (comprising transportation and public utilities; trade; finance, insurance, and real estate; services; and government industries) posted losses in every District state except Kentucky. Compared with other service-producing industries in Ohio and Pennsylvania, government's performance was strong: For Ohio, the increase of 7,300 jobs in government was the only net industry employment gain from May 2001 to May 2002.

Kentucky Employment

                                       Thousands of employees
                                      Change from   Change from
                          May 2002      May 2001     April 2002

Payroll employment         1,827.4         14.5          3.8
  Goods-producing            409.3         -7.7          1.0
    Mining                    20. … 
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