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State and regional employment and unemployment in 1983.

During 1983, the United States recovered from one of the longest and deepest recessions since World War II. At the end of 1982, employment had reached its recession low and the civilian worker unemployment rate had climbed 2.2 percentage points over the year. In marked contrast, data for 1983 document one of the most dramatic recoveries since employment and unemployment statistics have been collected, as the national civilian unemployment rate fell 2.5 percentage points during the year to 8.0 percent in December (not seasonally adjusted).

This brightening economic situation at the national level was also apparent in most States. Between the fourth quarter of 1982 and that of 1983, only seven States reported over-the-year declines in nonagricultural employment. Many of those decreases were small, and all States reported either improvements or no change in unemployment. However, just as all industries and occupations have not participated equally in the current recovery, some States also have been slow to benefit from the upturn.

This article concentrates on employment and unemployment for States between the fourth quarters of 1982 and 1983. Unlike national data, State and area data are not adjusted for seasonality. Because month-to-month changes are subject to seasonal influences that can obscure cyclical developments and the underlying economic trends, the presentation is limited to changes from the same quarter a year earlier, because they are not affected by seasonal movements. National recovery

Propelled by a recovery led by consumer expenditures, U.S. nonagricultural payroll employment rose by 3.3 million persons from the fourth quarter of 1982 to the fourth quarter of 1983. Total employment (as measured by the Current Population Survey) rose 3.9 million.

More than 90 percent of the jobs lost during the recession resulted from employment cutbacks in goods-producing industries. By contrast, this sector contributed a third of the job growth in the recovery. Within the goods-producing sector, manufacturing regained about half of the jobs it had lost with durable goods employment growing at a rate of 6.5 percent between the fourth quarters of 1982 and 1983. Employment in mining, including oil and gas extraction activities, declined over the year as energy prices remained below previous highs. National employment in construction continued to drop during the first quarter of 1983, reaching a cyclical low in March. This decrease was followed by strong recovery, with employment in general contracting and special trades climbing sharply, while employment in heavy construction was stable.

Service-producing industries added more jobs to the economy over the year than goods-producing industries, but grew at a slower rate. Employment growth in this sector was greatest in industries of the services division, such as business services. Trade and finance, insurance, and real estate also experienced over-the-year job gains. Conversely, transportation and public utilities and government showed little or no growth. An analysis by State

Among the States with the largest decreases in unemployment over 1983 were many of those that had the largest increases in joblessness over the previous year or the longer 1979--82 period. They encompass the industrial heart of the Nation, including six East Central States--Alabama, Illinois, Indiana, Michigan, Ohio, and Tennessee. The key to the recovery in most of these States was a cyclical upswing in manufacturing. This upswing usually was accompanied by recovery in the construction, trade, and services industries. The following tabulation shows the percentage point changes in the unemployment rate by State:

States which produce oil predominated in the 13 States with small declines in unemployment (1 percent or less over the year). The small improvements seen in their labor markets are associated with the continued shortfall of demand in the oil market. Though increasing over the year, noncommunist country daily petroleum consumption in 1983 remained below the already depressed levels of 1982.

With the exceptions of Alaska and New Hampshire, the States with the fastest employment growth were in the country's southern half. However, large employment increases did not always coincide with large declines in unemployment rates. Only three States with rapidly growing employment were also included in the list of the 10 States having the largest reductions in their rate of joblessness. Labor force expansion in these States outpaced the Nation by 2 to 1 or more in all but North and South Carolina and Arkansas. The following tabulation gives the over-the-year employment change and the change in the unemployment rate between the fourth quarters of 1982 and 1983, by State:

Most of these "fastest growing" States have underlying trends of rapid growth and did not suffer the same increase in unemployment incurred by other States during the recession. This relates directly to their industrial composition.

The labor market performance of these rapidly expanding States was characterized, in general, by growth in all industry divisions. Growth in construction employment ranged from two to six times the national average in all States except Alaska and New Hampshire. All 10 States had service-producing sectors that grew faster than the national average and all but Alaska reported the same for manufacturing. Recovery by region.

As is apparent from the rankings of States by improvement in unemployment and employment growth, no one region of the country dominated the economic recovery. The nature of the recovery in each region depended on its economic base. The major geographic regions designated by the Bureau of Census are used to present a regional picture of the recovery. (See chart 1.)

North Central States. The North Central States, with their concentration of durable goods employment, experienced the steepest rise in unemployment of any of the four Census regions over the year ending in the fourth quarter of 1982.

However, with a

2.9-percentage-point drop in unemployment, the region also experinced the largest over-the-year decline in joblessness between the fourth quarter of 1982 and that of 1983. (See table 1.) The largest improvements in the unemployment rate were made in its Eastern States (East North Central division). Each of these States had greater declines than the average 2.1-percentage-point reduction recorded for the Nation. Michigan had one of the largest reductions in joblessness in the Nation (4.2 points). However, declining numbers of workers in the labor force, partly because of outmigration but also because of withdrawal from the labor force perhaps caused by discouragement and other factors, contributed to the reduction in unemployment in all East North Central States except Ohio. The North Central region was the only Census region to report an overall decline in labor force size.

In the northern States west of the Mississippi (West North Central States), the unemployment rate fell less than half as many points as in the Eastern half of the region. At the same time the labor force grew slightly. In these West North Central States, proportionally fewer jobs depend on cyclically sensitive manufacturing industries.

The North Central State's nonagricultural payroll employment rose by about 1.5 percent over the year, the slowest rate of growth for any of the four Census regions. (See table 2.) Minnesota recovered fastest (3.5 percent), followed by Michigan (2.9 percent), while Illinois and Iowa registered declines. Ohio and Michigan added the most jobs in this region. Employment growth in durable goods outpaced that in nondurable goods in ever North Central State. Increased production of transportation equipment was the key to the recovery. In most States, related employment gains took the form of recalls or hiring of workers for motor vehicles and parts production, resulting from increased automobile sales. Kansas, where the aircraft industry accounted for most of the transporation gain, was the exeption. While Michigan was the major benefactor of increased automobile sales, other States--particularly those in the East Central division--also benefited either because of their own automobile production or because of their production of parts for automobiles. In Indiana, Michigan, Ohio, and, to a lesser extent, Illinois and Wisconsin, employment levels in primary and fabricated metals rose more rapidly than in other regions. Like automobile production, employment in the Nation's primary and fabricated metals and nonelectrical machinery industries is concentrated in the North Central States. Though these industries did recover over the year, the performance was not as dramatic as that in transportation equipment. Despite the strong recovery in durable goods production, at the close of 1983, manufacturing employment levels in nearly every North central State were from 10 to 20 percent below fourth-quarter 1979, prerecession levels.

When compared with the rest of the Nation, over-the-year performance in construction employment among States in the region was more modest than that in manufacturing. Only in Minnesota and North Dakota did the gain surpass the national growth rate. Five of the twelve States had over-the-year declines. The North Central was the only region with a net over-the-year loss in construction employment.

Employment in the service-producing sector in this region grew over the year by only half a percent. Gains in trade and in finance, insurance, and real estate were nearly offset by losses in transportation and public utilities and in government. While losses in transportation and public utilities were widespread, government cutbacks were concentrated in Illinois (29,000), Michigan (11,000), and Indiana (3,000).

Northeastern States. Unemployment fell 1.9 percentage points and nonagricultural payroll employment rose 2.1 percent over the year in the Northeast, putting this region in third place among the four regions in both of these measures of economic performance. The largest improvements in unemployment were in New Hampshire (3.5 percentage points) bringing its rate down to the lowest in the country (3.8 percent) and in Rhode Island (3.2 percentage points). Maine registered the smallest improvement in the region (0.5 percentage points).

New Hampshire also had the largest increase in nonagricultural employment (6.1 percent), followed by New Jersey (3.5 percent). Employment in all of the New England States expanded at rates of 2 percent or more while Pennsylvania grew at 1.1 percent and New York at 1.6 percent. In contrast to the North Central States, recovery in the Northeast was concentrated in the service-producing sector. Every State gained in trade; finance, insurance, and real estate; and services. The rate of expansion for the region approached the national average increase in these industries. Trade and services provided most of the additional jobs. Each State also had higher levels of construction employment than a year earlier, showing percentage gains about equal to the national average for the industry.

Employment in manufacturing averaged a gain of less than 1 percent. Manufacturing registered little change in Connecticut, New York, and Pennsylvania. Counter to the national trend, durable goods employment fell over the year in Connecticut and New York. The strength of the region's electronic equipment industry--especially in New Jersey and New England--accounted for most of the job gains in manufacturing. Textiles and apparel, though slow-growing among manufacturing industries nationwide, also added jobs in the Northeast.

In the Northeast, primary and fabricated metals manufacturing and nonelectrical machinery manufacturing industries, which provided about one-fourth of this region's manufacturing employment, either registered no significant change or declined during the period.

Southern States. The Southern States displayed an improvement in unemployment over the period that was similar to that shown by the Northeast. Unemployment fell 1.8 percentage points over the year to a fourth-quarter 1983 average of 7.9 percent. Over the same period, however, the South's labor force expanded faster than in any other Census region (1.5 percent). The rate of growth in nonagricultural employment was nearly 1 percent faster than that of the Northeast.

The three Southern States with the largest declines in joblessness were Alabama (4.1 percentage points), South Carolina (3.2 percentage points), and Tennessee (3.4 percentage points). The smallest unemployment declines were in the District of Columbia (0.4 percentage points) and the oil-producing States of the West South Central--Louisiana (0.9 points), Oklahoma (0.3 points), and Texas (0.6 points).

While the South's overall labor force expanded, Kentucky, Mississippi, South Carolina, and West Virginia had fewer labor force participants in the fourth quarter of 1983 than they had a year earlier.

Oover the year, nonagricultural payroll employment rose 2.9 percent with increases about evenly split between the goods-producing and the service-producing sectors. Although 6 of the 10 fastest growing States were in the South, the region also had 3 of the 7 States with net job losses. Employment changes ranged from a 6.1-percent increase in Florida to a decline of 1.4 percent in Oklahoma, with the fastest growing States being those along the South Atlantic Coast.

Most additional jobs (61 percent) came from the trade or services industries which--along with finance, insurance, and real estate--had employment levels of 4 percent above those of fourth-quarter 1982. construction grew faster (5 percent) than other industries, accounting for about 10 percent of the region's net employment gain. Half of the Nation's 1983 construction job gains were in this region. The South Atlantic States, particularly Florida, accounted for most of these increases.

Manufacturing accounted for one-fifth of the region's net gain in jobs, with about seven-tenths of those in durable goods industries. Durable goods employment outperformed nondurable goods in every State but Louisiana and Texas. Durable goods added more jobs than nondurables even in those States where durables was a smaller proportion of employment. This occurred despite significant employment increases in textiles and apparel. The recovery in construction across the country, and particularly in the South, fueled an expansion in the lumber industries throughout the region. In addition, metal products and machinery, major industry classes that showed little improvement throughout the North Central and the Northeast, and electrical equipment showed some recovery in the East Central and South Atlantic segments of the Southern region.

The worldwide decline in demand for energy resources, the result of worldwide recession and, to some extent, energy conservation efforts, cut deep into mining employment in the coal-producing States of Kentucky and West Virginia and the oil-producing States of Louisiana, Oklahoma, and Texas. Louisiana, Oklahoma, and West Virginia were the only Southern States with over-the-year declines in total nonagricultural employment.

This decline in demand not only brought down employment in mining but also employment in production of mining equipment and in services used for locating and extracting energy resources. The biggest declines in the oil States of the West South Central came in the fourth quarter of 1982, the starting point for comparisons here. While employment levels were down over the year at that time, looking back to fourth-quarter 1981 gives a better picture of where fourth-quarter 1983 employment levels were. Over the 2 years, employment in the manufacture of oil field machinery was cut in half in Texas and by more than a third in Oklahoma. Compared with 1981, manufacturing employment was about 15 percent lower in Texas and Oklahoma and 20 percent lower in Louisiana. The devaluation of the Mexican peso, also related to the slack in world oil markets, had an impact on labor markets on the Texas side of the Mexican border. At yearend 1983, retail trade employment in border areas remained well below its year-earlier level. Unemployment rates in these metropolitan areas were among the highest in the United States.

Western States. As one of the faster growing regions over the last decade, the West appears to have taken the fast track again in 1983. Unemployment retreated an average 2.4 percentage points while the labor force expanded. Nonagricultural payroll employment rose faster in the West than in any of the other Census regions.

Between the fourth quarters of 1982 and 1983, Arizona had the largest decline in unemployment of the Western States (3.6 percentage points). However, between the fourth quarter of 1981 and that of 1982, it had the largest increase in unemployment--4.3 percentage points. Improvement in unemployment between the fourth quarters of 1982 and 1983 among five other Western States matched or exceeded the national change over this period. The smallest changes in jobless rates were registered in Alaska and Wyoming, each essentially unchanged.

With the exception of Mongtana and Wyoming, every State in the West reported higher employment levels at the close of 1983 than they did a year earlier. As in the South, both the godds- and the service-producing sectors grew at approximately the same rate (3 percent). The most rapid expansion took place in Arizona (6.2 percent), Nevada (5.6 percent), and Alaska (5.5 percent). In each of these States and in the region overall, construction posted the most rapid gains of the major industries. Construction gains in the West, with about two-thirds concentrated in California, accounted for more than one-third of the national increase in construction employment. (Except for California, it should be noted that these States have relatively small populations.) Services; trade; and finance, insurance, and real estate were the next fastest growing.

The nationwide resurgence in construction activity brought recovery to the lumber industry of the Pacific Coastal States and those Mountain States engaged in lumber production. In another major source of employment for the region, aircraft and parts production has been curtailed and job losses have been severe. Particularly hard-hit was Washington, where the aircraft industry employed about 4 percent of the nonagricultural work force in fourth-quarter 1983. Cutabacks in the industry amount to about 10,000 jobs over the year. Manufacturing employment in Washington fell by more than 3,000. However, because of strong growth in its service-producing sector and despite net job losses in construction, Washington had a 2.5-percent rate of employment growth.

As in several Southern States with appreciable mining employment, depressed market conditions both for metals and energy resources took a toll on employment in nearly every Western State. The largest losses in mining jobs, both in terms of number and rate of decline, occurred in Wyoming, Montana, and New Mexico. Wyoming, which has more of its employment concentrated in mining than any other State, had cutbacks that amounted to about two-fifths of the State's net job loss. Wyoming lost jobs over the year at a rate of 3.6 percent, with government the only industry division reporting increased employment.

THE LARGEST REDUCTIONS in unemployment occurred in the North Central States. However, the reductions appear to be in part the result of declines in their labor forces. Employment growth was generally below average, with the great majority of added jobs occurring in manufacturing. With one exception, fourth-quarter 1983, employment in these States remained below their previous economic peaks. Generally, the most rapid job expansion occurred in the South and the West. While construction and manufacturing recoveries were fast paced in these regions, most new jobs came from services and trade. Still, the recovery in many of the "Sunbelt" States of these regions was dampened by their dependence on income from oil.
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Author:Stamas, George D.
Publication:Monthly Labor Review
Date:Sep 1, 1984
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