In Time of Low Overall Unemployment, State Level Data Shows Significant Variance


coatings

The recent decline in the civilian unemployment rate to 3.9 percent as of the most recent Bureau of Labor Statistics publication has been headline news and suggests that the market for workers is beginning to tighten significantly. However, there is substantial variance in state employment markets, with states like Hawaii, North Dakota, and New Hampshire enjoying extremely low rates of unemployment, while states such as Alaska, New Mexico, West Virginia, and Nevada continuing to have unemployment rates that are much higher than the national average.

As shown below, there is no clear pattern to labor market conditions, which are affected by a variety of issues including migration patterns, local economic conditions, a state of region’s reliance on specific industries (such as energy exploration), etc.

unemployment
2018 Q1 Total Unemployed, as a Percent of the Civilian Labor Force by State; Note: 4-quarter moving average; AK (7.7%) and HI (2.3%) are omitted; Source: St. Louis Federal Reserve

The coatings industry is concentrated in states such as Ohio and Illinois, for example, where unemployment is currently higher than average (both states show 4.7 percent unemployment rates as of Q1 2018). A state’s overall level of unemployment can also be an indicator of the overall strength of the local economy, which would influence retail sales, new construction, the strength of the existing homes market, and other factors that would influence the strength of the coatings markets, particularly those for architectural coatings

Contact ACA’s Allen Irish for more information.