Eighth District Fares Better than Nation in Job Losses by ProQuest


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									d i s t r i c t                     o v e r v i e w

                                                                                                               St. Louis


Eighth District Fares Better

than Nation in Job Losses                                                                          ARKANSAS                 Memphis

                                                                                                     Little Rock                       The Eighth Federal Reserve District is
By Craig P. Aubuchon, Subhayu Bandyopadhyay,                                                                          MISSISSIPPI      composed of four zones, each of which
                                                                                                                                       is centered around one of the four main
Rubén Hernández-Murillo and Christopher J. Martinek                                                                                    cities: Little Rock, Louisville, Memphis
                                                                                                                                       and St. Louis.

I  t is no secret that the recent recession has
   hit labor markets hard. From December
2007 to October 2009, the U.S. economy lost
                                                  October 2009 for the following categories:
                                                  resources, mining and construction; manu-
                                                  facturing; financial services; and profes-
                                                                                                   job losses of the four metro areas. Payroll
                                                                                                   employment fell 1.6 percent in the Little
                                                                                                   Rock area from October 2008 to October
more than 7 million jobs, a decline of 5.3        sional and business services. Furthermore,       2009—well below the national experience.
percent in total employment. In contrast,         each MSA experienced higher growth than             Little Rock experienced the largest
during the 2001 recession, the U.S. economy       the U.S. for government services during this     year-over-year job declines in the trade/
lost 1.5 million jobs, or 1.2 percent of total    same time period. In contrast, each MSA          transportation/utilities (–6.9 percent), man-
employment. Furthermore, the U.S. labor           also performed worse than the U.S. in cer-       ufacturing (–5.7 percent), professional and
market has yet, perhaps, to hit the bottom.       tain industries. Both Louisville and Little      business services (–4.4 percent) and other
After the five previous recessions, it took       Rock experienced a greater decline than the      services (–3.8 percent) sectors. These losses
an average of about 25 months to return to        nation in trade, transportation and utilities,   were partly offset by gains in the leisure/
full employment, with the shortest return         while Memphis experienced a sharper              hospitality (4.6 percent), education/health
following the 1980 recession (10 months)          decline in information services. Finally,        (2.2 percent), information (1.1 percent) and
and the longest return to full employment         both Memphis and St. Louis experienced a         government (1.4 percent) sectors.
following the 2001 recession (46 months).         greater decline in leisure and hospitality          In October 2009, Little Rock had the
On the plus side, in this latest recession, the   services than the U.S. for the December          highest concentration of employment, as
four largest Metropolitan Statistical Areas       2007 to October 2009 period.                     compared with the other three District
(MSAs) of the Eighth District—St. Louis,             The accompanying chart presents changes       MSAs, in the aforementioned industries of
Little Rock, Louisville and Memphis—per-          in employment for the period October 2008        growth, with the exception of leisure/hospi-
formed somewhat better than the nation.           to October 2009. Similar to the experience       tality. Government services made up 20.5
   Between December 2007 and October              since the start of the recession, each MSA       percent of the total employment in Little
2009, each of the four MSAs in the Eighth         was below the nation in percentage of jobs       Rock, information services made up 2.6
District experienced a lower decline in total     lost for most categories during this time        percent, and education and health services
employment than the nation as a whole.1           period. Furthermore, each MSA began              represented 14.6 percent, second only to
Little Rock, with a 1.5 percent decline, lost     to see stronger job performance (deter-          St. Louis, a city with 16.5 percent employ-
the fewest jobs as a percent of total employ-     mined by fewer jobs lost relative to the         ment in this sector.
ment, followed by St. Louis (–3.9 percent),       nation and other Eighth District MSAs,              Within the Little Rock Zone (a Fed
Memphis (–3.9 percent) and Louisville             or by job growth) than the U.S. for those        demarcation), Fort Smith, Ark., and Tex-
(–4.3 percent). These cities represent just       industries with the highest relative share       arkana, Ark., posted year-over-year job
1.6 percent of total jobs lost during the cur-    of employment.                                   declines of –1.7 and –2.1, respectively, both
rent recession, or just over 100,000 jobs.2                                                        in excess of Little Rock’s. In Fayetteville,
                                                  Little Rock Zone
   More surprising was the mix of job losses.                                                      Ark., the decline was 1.5 percent.
While the latest recession fueled the long-          Little Rock fared the best among Eighth
                                                  District MSAs during the recent recession.       Louisville Zone
term trend in the loss of manufacturing
jobs, it also increased job losses in sectors     It was the last to lose jobs over previous          From October 2008 to October 2009,
that are typically considered recession-          year’s levels. November 2008 marked the          payroll employment in the Louisville area
proof, such as information and financial          first month since November 2002 that the         dropped 3 percent. Many of these lost jobs
services.3 A sector-by-sector comparison          Little Rock metropolitan area experienced a      were in goods-producing industries. More
between the four largest Eighth District          decrease in year-over-year payroll employ-       than 16 percent of the Louisville work force
MSAs and the U.S. reveals that each MSA
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