Gulf Coast Unemployment Trends, 2000 to 2010: Hurricanes, Recessions, Oil Spills
Coughlan, John A., Monthly Labor Review
Four major events had the potential to adversely influence the unemployment rate of the coastline counties along the Gulf of Mexico from 2000 to 2010: the 2001 recession, the 2005 hurricane season, the 2007-2009 recession, and a major oil spill caused by an explosion on the Deepwater Horizon drilling rig in April 2010. This report examines changes in the unemployment rates in the Gulf coastline counties and compares them with their statewide unemployment rate changes and with changes in the U.S. unemployment rate. The primary data used for the analysis are unemployment rate data from the Bureau of Labor Statistics (BLS, the Bureau). (1) Unemployment rate data also were obtained from the state government of Louisiana for five parishes from September 2005 to June 2006; these data are not available from the Bureau. (2)
Coastline counties defined
This study adheres to the definition of coastline counties used by the U.S. Census Bureau. In a 2010 Census Bureau report authored by Steven Wilson and Thomas Fischetti, coastline counties were defined as counties "adjacent to water classified as bay, estuary, gulf, sound, ocean, or sea." (3) Using the Census Bureau's Topologically Integrated Geographic Encoding and Referencing (TIGER[R]) system, Wilson and Fischetti identified 56 coastline counties (parishes in Louisiana) along the Gulf of Mexico. A list of the coastline counties and parishes used in the analysis that follows is given in exhibit A-1 in the appendix.
Gulf coastline unemployment rates
In order to examine the region of the Gulf of Mexico as a whole, an unemployment rate for all 56 coastline counties and an unemployment rate for the coastline counties in each of the five states along the Gulf were calculated. The unemployment rate for all 56 coastline counties was produced by summing the labor force and unemployment levels for all counties and then dividing the total unemployment level by the total labor force for the region. The unemployment rate for the coastal region of each of the five states was constructed in a similar manner. Mathematically,
Gulf coastline unemployment rate for all coastline counties = Sum of unemployment level in all 56 counties/Sum of labor force level in all 56 counties x 100
Gulf coastline unemployment rate in a given state = Sum of unemployment level for coastline counties in that state/Sum of labor force level for coastline counties in that stat x 100
Analyzing data not seasonally adjusted
The Bureau does not calculate seasonally adjusted unemployment rates at the county level.
Therefore, monthly occurring series used in this report are not seasonally adjusted and contain seasonal factors--cyclic movements in the data--that occur at the same time each year. In order to isolate the underlying trends from the seasonal factors, changes over time are calculated by comparing data for a given period with data for the same period in the previous year. That way, deviations from the seasonal movements may be uncovered. For example, a change in unemployment between January and April of one year must be compared with the change over the same period the previous year. Noteworthy changes are changes that are substantially different from those posted for the same period the previous year.
Unemployment trends, 2000 to 2010
Chart 1 illustrates the unemployment rate trend in the Gulf Coast and in the United States as a whole from 2000 through the end of 2010. The top left panel plots the monthly unemployment rate, not seasonally adjusted, for each series. The seasonal factors in the monthly data are clearly evident in the cyclic peaks and troughs that occur at regular intervals in most years. During the 2000-2010 period, the unemployment rate in the Gulf coastline counties tracked the national unemployment rate closely. The top right panel of chart 1 plots the difference in the two monthly series and reveals that the unemployment rate of the Gulf coastline counties was never more than 1 percentage point away from the national unemployment rate, with the exception of the 2005 hurricane season. …