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Tuesday, March 31, 2020

February Jobs Numbers: An Overview

February was the last month before the coronavirus-imposed regulatory disruption. 

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I repeat my advice: do not pay attention to any macroeconomic numbers until June. March, April and May will all be artificially affected by the disruption. 

I am pointing this out because there is a growing narrative out there that we are now in a recession. We are not. A recession is caused by the loss of confidence in the economy; when the economy loses confidence in the future it does not recover until that confidence is restored. When the economy is disrupted by regulations it recovers as soon as the regulations are removed. 

The state-by-state jobs numbers from February give us a good idea of where the economy "left off" before the disruption. We also get a good idea of what levels we can expect to get back to once the regulations are lifted. 

Starting today with a quick overview, we notice that 41 states saw annual growth in private-sector employment. Six states exceeded two percent jobs growth, two of which are in our region: Utah at 2.9 percent and Idaho at 2.5 percent. Wyoming, we should note, was second from the bottom, with 0.9 percent fewer private-sector jobs in February this year compared to last year:

Figure 1
Source of raw data: Bureau of Labor Statistics

Our neighbor states did fairly well, all of them seeing growth in jobs. However, the trends are mixed. In five states, job growth tapered off:

  • Colorado saw 1.75 percent, compared to 2.13 percent for 2019;
  • Idaho was down from 3.06 percent in 2019 to 2.5 percent in February;
  • North Dakota dropped from 1.07 percent in 2019 to 0.55 percent in February; 
  • Utah experienced a drop from 3.1 percent last year to 2.86 percent in February; and
  • Wyoming was down from 1.66 percent in 2019 to -0.9 percent in February.

Montana, Nebraska and South Dakota saw an increase in job creation: 

  • Montana from 1.25 percent in 2019 to 1.6 percent in February; 
  • Nebraska from 0.33 percent in 2019 to 1.16 percent in January this year and 1.4 percent in February; and 
  • South Dakota from 0.6 percent in 2019 to 1.3 percent in February;

In other words, the economy in the Mountain States region is generally strong. Utah, again, comes out at the top, and with the second-strongest performance in the nation they remain an economic role model. As I reported yesterday, their performance in terms of employee compensation is at the top of the country.

Wyoming remains the troubled child. In a coming article we will get a better picture of where our state actually is at this time. A review hours and wages will tell us if our record from January stands: Wyoming was the only state that started 2020 with a loss of jobs, wages and hours worked. Let us hope that is not the case in the February numbers. 

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