Paul Turek is Employment Security’s statewide labor economist.
The final hours of 2014 are rapidly ticking away, and as such, it is often customary to reflect on the past year as well as prepare for the New Year. It is with this thought that we turn our focus to the state’s labor market situation; how it fared in 2014 and what might lie ahead moving into 2015.
2014 is shaping up to be the best year in terms of monthly job growth for the century.
Each month the Employment Security Department releases a state employment report that is compiled in cooperation with the U.S. Bureau of Labor Statistics. The report discloses the number of jobs the state economy generated during the previous month as well as the unemployment rate. These two measures can be evaluated over the course of the year as well as be compared with previous years in order to gather some perspective about the state of the labor market.
Since it takes time to collect and assess employment data, the monthly state employment report releases data pertaining to the previous, rather than the current month. Therefore, data reported for November will be released in December; data reported for December will be released in January, and so forth. This leaves 11 months of data to look at for calendar year 2014, with December data not yet available.
The 2014 assessment of labor market conditions reveal a notable improvement in terms of nonfarm employment growth and a declining rate of unemployment. Employers across the state added an average of 7,200 jobs per month through the first 11 months of this year, up from an average of 6,200 jobs per month in 2013. The calendar year 2014 also is shaping up to be the best year in terms of monthly job growth for the century (granted, this century is only 15 years old). The year 2005 comes the closest in comparison when 7,000 jobs per month were created.
Not only has job growth been firmer, it has also been more broadly based. Gains in higher-paying sectors such as construction and professional and technical services have been prominent.
The momentum generated in the labor market is likely to continue into next year.
Job growth represents more employment opportunities that drive down the unemployment rate. Over the course of the year, the state unemployment rate has declined from 6.4 percent in January to 6.2 percent in November, seasonally adjusted. The decline has not been steady, particularly since the rate increased from 5.7 percent in September. The bump-up has occurred largely as new job seekers, buoyed by improving job prospects, moved back into the labor force in large numbers seeking work. The jobs available from September through November could not accommodate all who were looking, so the number of unemployed increased to drive up the rate.
The momentum generated in the labor market is likely to continue into next year. The increase in employment over not only this year, but in the previous four years has generated more income and put the consumer in a much better position. Along with lower gasoline prices, this should help bolster consumer confidence and promote spending in coming months.
Job growth in 2015 may be expected to occur at a pace comparable to 2014 which should allow the unemployment rate to move back under 6 percent.