d i s t r i c t o v e r v i e w
ILLINOIS
INDIANA
St. Louis
Louisville
Eighth District Fares Better
MISSOURI
KENTUCKY
than Nation in Job Losses ARKANSAS Memphis
TENNESSEE
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