“Hampton Roads is consistently outperforming the nation throughout this recession”
by James Clary, Hampton Roads Planning District Commission (HRPDC) Economist, originally published in the Fall 2009 issue of “Hampton Roads Review”
The Hampton Roads labor market is still struggling with recessionary forces, as is evidenced by conflicting data from the Virginia Employment Commission (VEC). The regional unemployment rate fell from 7.39% in June to 7.00% in July and to 6.61% in August (a decline from 7.08% to 6.37% unemployment using seasonally adjusted data). This might lead one to believe that the labor market has bottomed out; however, seasonally adjusted payroll employment fell 700 jobs between June and August, and August employment numbers represented a year over year decline in jobs of 1.14%, continuing the high year over year declines in June and July, showing that the summer employment was significantly below the previous year’s. Also, while initial unemployment claims have fallen off their peak in June, another 6,063 filed unemployment for the first time in July, and another 5,866 in August (both numbers are seasonally adjusted). This is significantly above the recession average of 4,890 new claims a month, and the historical average for the region is only 4,300 (going back through 1984).
Current Population Survey (CPS)
All numbers in this section are seasonally adjusted.
The VEC conducts the CPS survey to calculate the unemployment rate for the state, Metropolitan Statistical Areas (MSAs), and localities, but this survey also reports on the labor force, number of employed, and number of unemployed, and there is great value in examining this data as well. The regional labor force fell by 1,032 between July and August, the fourth consecutive month of decline (this plays a significant role in the improving unemployment rate). This indicates that either the region is losing population, or more probably that workers are becoming discouraged and have stopped looking for work. Also of interest is the number of employed, which increased by 2,056 between July and August as compared to a 700 job decline in payroll employment. The difference between the two numbers is a result of measuring slightly different types of employment. Because the CPS surveys households rather than business, it catches entrepreneurs and contract laborers who are more responsive to economic recovery. Continued increases in the CPS employment numbers should be taken as a modestly positive sign.
National Standing
Hampton Roads has consistently outperformed the nation throughout this recession. Moody’s Economy.com estimates that Hampton Roads Gross Product grew 0.1% between the first and second quarter of this year, and that the Gross Product has only declined 0.8% from the start of the recession (this compares favorably to the 2.8% decline in Gross Domestic Product, and an average 3.7% decline experienced in large metropolitan areas). Improvement in the labor market will lag economic recovery, but the region’s labor market has weathered the economic downturn significantly better than the rest of the country. Employment has decreased by 1.55% in the region versus a 5.02% decline in national employment, and the regional unemployment rate of 6.37% was significantly the national level of 9.66% in August (seasonally adjusted).