State Labor Markets in June

The June data on jobs by state show at best modest changes from May levels. Only 5 states (Georgia, Illinois, Massachusetts, North Carolina, and Tennessee) saw gains that BLS deemed to be statistically significant. The majority of states reported insignificant gains, but there were some insignificant losses as well, and West Virginia experienced a (significant) 1.1 percent drop. The sum of the state job changes was 211,700, which was almost exactly the same as the national survey’s figure of 213,000. However, the similarity was the result of substantially different seasonal adjustment factors. On a not-seasonally adjusted basis, the sum of the state monthly changes was 526,000, which seems considerably smaller than the reported national number of 646,000. As the divergence between the not-seasonally adjusted and adjusted figures show, June is normally a month of pronounced job growth, given seasonal hiring and the transition of school graduates into employment. The precise timing of these transitions by state and industry is hard for seasonal adjustment factors to predict and can lead to some seemingly-odd results. For instance, New Jersey, a state rather notorious for the surge in employment on the shore every summer, had a 63,000 gain in jobs, not seasonally-adjusted, but a 500 loss, seasonally-adjusted. The state’s not-seasonally gain of 30,000 jobs in June in leisure and hospitality—an increase of about 7 percent—became a 3,000 loss, seasonally adjusted (there have, however, been no reports that Garden State Parkway traffic has been light on a seasonally adjusted basis).

Over the last year 32 states reported significant job gains, led by 3.0 percent increases in Idaho and Texas. Alaska and North Dakota were the only states to have fewer jobs in June 2018 than in June 2017, but in both cases the drop was not considered to be statistically significant. On a regional basis, job gains continue to be strongest in that western belt of states running generally from Texas to the Pacific. Aside from Alaska and North Dakota, job growth has been soft (1 percent of less) over the last year in numbers of states in the Ohio and Mississippi River Valleys. With a few scattered weaker exceptions (Vermont, Connecticut, DC, and Montana) growth in the rest of nation has been between 1.1 and 2.0 percent.

Unemployment rates across the nation appear to be continuing their recent trend of converging. One again, Alaska is the exceptional outlier on the high side (7.1 percent) and Hawaii on the low side (2.1 percent). It would, of course, be quite costly for Alaska job seekers to obtain work elsewhere, and costly for residents of other states to move to Hawaii to fill the vacant positions there. West Virginia was the only state other than Alaska to have an unemployment rate above 5 percent in June, and Hawaii was the only state to have a rate below 2.5 percent. 28 states—including the four largest (California, Texas, Florida, and New York), as well as West Virginia--had unemployment rates not statistically different than the national mark of 4.0 percent. With the exception of Alaska (and, on the other side, Hawaii), it seems as if lower temperatures go with lower unemployment: many more northerly states, both in New England and in the Plains, tended to have low June reads on the unemployment rate.