November 15, 2012
Virginia’s unemployment rate was 5.9 percent in September – unchanged from the prior month – and the state added 11,500 jobs, according to the latest seasonally adjusted numbers released by the Bureau of Labor Statistics in October. That sounds OK, right? Not great but at least not going in the opposite direction. But there’s a problem.
Significant month-to-month fluctuation in state employment statistics, not to mention the monthly revisions of the previous month’s numbers, make these monthly jobs reports good for headlines but not especially reliable for trend spotting. Instead, quarterly data, which also was released last month, can provide a clearer picture of the underlying direction of Virginia’s economy. We looked at that data for the third quarter of 2012 – which ended last month – and it’s a challenging picture.
Virginia’s average third quarter unemployment rate was 5.9 percent, an increase from 5.6 percent in the second quarter of 2012. And average employment levels dropped by 1,600 compared to the prior quarter. This would be a relatively minor loss except for the fact that Virginia needs to be adding over 10,000 jobs every month if we hope to climb out of our jobs hole before the next recession hits.
The change in Virginia’s unemployment rate was caused by a jump in the seasonally-adjusted number of unemployed workers in Virginia, and it comes despite 10,500 workers dropping out of Virginia’s labor force in the third quarter and in contrast to modest improvement in the national economy during the same time period.
Overall, an average of 255,000 Virginia workers were unemployed in the third quarter, up by 11,800 from the prior quarter.
Additional analysis of the most recent data shows:
- Virginia’s jobs deficit, or the difference between the number of jobs Virginia has and the number it needs to regain its pre-recession employment rate, is 314,000. That number includes the 44,800 jobs Virginia lost in the recession plus the 269,200 jobs we need to keep up with the state’s growth in population in the 57 months since the recession began.
- In the past 12 months, Virginia has added an average of 3,000 jobs per month. But, in order to return to pre-recession employment levels in the next three years, we need to create at least 13,000 jobs every month and 156,000 jobs every year. That is a rate of job creation that Virginia has not achieved in the past 30 years.
- Three years out from the official end of the recession, the unemployment rate is 37 percent higher than it was during the worst part of the last recession in 2001.
Bottom line: We are not out of the woods yet, in Virginia. And when you catch up with all the month to month revisions and smooth out for seasonal fluctuations, “Q3 2012” was not very good.