Press Release: State's unemployment rate in May 6.5 percent

June 25 press release from the New Mexico Department of Workforce Solutions, Office of the Secretary, Economic Research & Analysis Bureau,  Albuquerque

New Mexico’s seasonally adjusted unemployment rate was 6.5 percent in May 2009, up from 5.8 percent in April and 4.0 percent a year ago. The national unemployment rate increased to 9.4 percent.

The rate of over-the-year job growth, comparing May 2009 with May 2008, was negative 2.4 percent, representing an over-the-year loss of 20,500 jobs. Even with strongly negative job growth, New Mexico outperformed many other states, ranking eleventh highest in May. Every state except North Dakota reported declining year-over-year employment. Still, recent performance is worse than we have experienced in decades.

Previously, the state’s job growth had not been negative since June 1991, almost 18 years ago. At that time, job growth turned negative for just one month. The last period of sustained job losses in the state occurred from October 1986 through February 1987. The state has not experienced the current level of sustained hardship since 1954 when jobs declined by 3.6 percent at the worst point. This followed a decade where job growth averaged more than 6 percent.

As mentioned last month, during such turbulent times, no single indicator fully summarizes New Mexico’s workforce conditions. Job growth is at a 55-year low, while the unemployment rate is only at a 12-year high. Individual data series appear to contain conflicting messages or may be at different points in the economic cycle. We recommend looking at all the workforce indicators—unemployment, job growth, and unemployment insurance claims—published in this report.

Only two of the state’s 13 industries posted any job growth since last year, while the 11 others reported employment declines. Government and private health care appear to offer the best employment prospects for the state as we continue to endure difficult economic times. Most of the gains came from the educational & health services industry, which was up 3,500 jobs on the year from strength in both components of the industry. Government also posted a year-over-year gain, adding 2,200 jobs. Many of the new government jobs are at the federal level now that hundreds of census workers joined the federal government payrolls in preparation for the massive Census 2010 endeavor.

Mining generated over-the-year gains until February when job losses escalated and employment slipped below last year’s level. Layoffs continued for subsequent months, and the industry is now down 1,700 jobs on the year. Previous gains in mining employment occurred last summer when commodity prices reached record levels. The construction industry reported 8,300 fewer jobs in May 2009 than in May 2008. The industry is going through a difficult period of adjustment following four years of growth that resulted in the creation of 14,000 new jobs. The state also lost 4,100 manufacturing jobs over the last year, with reductions reported across the board. As was widely reported, Eclipse Aviation recently ceased production of its light aircraft, adding to the losses in manufacturing.

With a rather dismal holiday shopping season far behind us, the short-term outlook for retail trade appears no better, with a reported 3,800 fewer jobs in May than at the same time last year. A number of faltering retailers held on through the peak holiday season then had liquidation sales early in the new year before finally closing. The much smaller wholesale trade industry did not fare much better, reporting 1,100 fewer jobs. The professional & business services industry, often considered a barometer for the rest of the economy, reported employment that was down by 2,400 jobs from last year. The transportation, warehousing & utilities industry lost 1,300 jobs, down 5.2 percent.

Leisure & hospitality reported 1,700 fewer jobs, with most of the declines coming in the accommodation and food services component. The financial activities industry also lost jobs, declining by 1,200 since last May. The miscellaneous other services category reported 500 fewer jobs than at this time last year. This follows a seven-month boom in employment in the run-up to the national election last year. The major political parties and social advocacy organizations boosted employment by as many as 1,000 jobs from April to October last year.

Finally, the information industry reported an over-the-year decline of 100 jobs. This industry is still doing fairly well, but the comparison is to a strong period last year. The source of employment opportunities has been the state’s film industry. This industry has done well over the last three years despite the large month-to-month employment swings that are common in film production work. During times of intensive production, employment in the state’s film industry has been as many as 3,000 jobs above baseline levels.

The Albuquerque area’s seasonally adjusted unemployment rate was 7.0 percent in May, up eight tenths of a percentage point from a revised 6.2 percent in April. Unemployment has risen three full percentage points from last May’s rate of 4.0 percent. About 11,900 more individuals were out of work in May compared to the same month a year ago.

Payroll employment rose by 1,700 jobs or 0.4 percent over the month, with expansions in six of the 12 economic supersectors. Construction and leisure & hospitality posted seasonal gains of 500 jobs each, while professional & business services and educational & health services recorded increases of 400 jobs each. Also expanding were retail trade (up 300) and miscellaneous other services (up 100). Employment levels remained unchanged in wholesale trade; transportation, warehousing & utilities; information; and financial activities, while government (down 300) and manufacturing (down 200) shed jobs from their April totals.

Over the last 12 months, payroll employment contracted by 2.9 percent as the Albuquerque area economy lost 11,600 jobs. Among the three expanding industries, educational & health services posted the largest increase, adding 1,400 jobs (up 2.7 percent). Employment growth has slowed considerably from a recent peak of 5.6 percent in February 2009, indicating that even this robust industry is being significantly impacted by the ongoing recession.

Government employment increased by 1,200 jobs or 1.5 percent, its slowest rate of growth since March of last year. Since the start of the national recession in December 2007, public-sector employment in the Albuquerque MSA has increased by 1,800 jobs and grown from 20.4 percent to 21.5 percent of total nonfarm payroll employment. Tribal casinos and related operations helped push local government employment up by 800 jobs or 1.9 percent over the year, while 2010 Census activities boosted federal government by 400 jobs or 2.7 percent. State government employment remained unchanged. Information (up 100) was the only other industry to add jobs since last May.

Construction posted its twenty-ninth consecutive month of decline, contracting by 4,500 jobs or 15.5 percent over the year. The rate of loss moderated slightly over the past two months after peaking at minus 17.4 percent in March. The impact of federal transportation stimulus funding should become evident in construction employment data as soon as next month. Governor Richardson broke ground on the I-40/Paseo del Volcan project on June 10, and the reconstruction work—a new overpass, new ramps, and new parts of Paseo del Volcan and Central Avenue—is expected to create 200 jobs and run through June 2011, according to the Department of Transportation. Other projects expected to be underway soon include improvements at Double Eagle II Airport, construction of the Paseo del Volcan extension in Rio Rancho, construction of a bicycle trail along I-40, and improvements to U.S. 550 in Bernalillo.

Manufacturing declined by 3,000 jobs or 13.4 percent, marking 24 consecutive months in negative territory. Although Advent Solar Inc. and Emcore Corporation have each reduced their workforces in recent months, government officials are optimistic that a solar energy cluster is beginning to take shape in the Albuquerque area. Schott Solar Inc. opened its new 200,000-square-foot facility at Mesa del Sol and expects to employ 350 by the end of the year. If market conditions prove favorable, the company intends to eventually grow to 1,500 employees at the site. Solar Array Ventures Inc. is slated to begin construction this summer on a planned 225,000-square-foot solar panel factory to be located in the Cordero Mesa business park on the western edge of Bernalillo County. Company officials expect the operation to employ about 220 by next year and approximately 1,000 within the next five years. Finally, Signet Solar Inc. will start hiring employees next year at a new 100,000-square-foot manufacturing facility coming to Belen. The company will initially employ 200 but could later expand to 400,000 square feet and 600 workers.

Employment in leisure & hospitality slipped by 2,100 jobs or 5.3 percent, the industry’s twelfth consecutive month of negative growth. The May decline, though still large, represented a slight improvement from April’s year-over-year loss of 6.3 percent.

Retail trade, a broad industry sector that includes both store and nonstore retailers, lost 1,800 jobs (down 4.1 percent), while the much smaller wholesale trade sector fell by 700 jobs (down 5.3 percent). Retail trade employment totaled 42,400 in May, up slightly from a five-year low of 42,100 in April.

Professional & business services posted an over-the-year loss of 1,300 jobs (down 2.0 percent). This industry is so large that its recent relatively small percentage decreases have translated into significant job losses for the Albuquerque economy. Three other industries recorded employment declines since last May—transportation, warehousing & utilities (down 400 jobs or 3.7 percent), financial activities (down 300 jobs or 1.6 percent), and miscellaneous other services (down 200 jobs or 1.6 percent).

The seasonally adjusted unemployment rate in the Las Cruces MSA was 6.5 percent in May 2009, up from 5.6 percent in April. A year ago, the area’s unemployment rate was 4.2 percent.

In May 2009, the Las Cruces area declined by a total of 400 jobs, with decreases in manufacturing, retail trade, leisure & hospitality, and government. Employment in eight other industries remained at last month’s levels.

The rate of over-the-year job growth for the Las Cruces area was negative at 2.7 percent, comparing May 2009 with May 2008. This month marks the third consecutive month of negative job growth for Las Cruces, a situation not seen since the 1991 recession.

Educational & health services continued to be solid with a gain of 300 jobs, growing 2.7 percent. Slight decreases at the state and local level in the government sector were offset by a 200-job gain at the federal level.

Eight industries—construction (-700); retail trade (-500); manufacturing (-300); leisure & hospitality (-200); transportation, warehousing & utilities (-200); information (-100); professional & business services (-100); and wholesale trade (-100)—reported fewer jobs compared to year-ago levels. Declining construction employment has been evident for some time, and the industry has experienced nearly two years of consecutive negative growth. Employment increases at area call centers, which helped the professional & business services industry expand, have now been factored into baseline numbers. Employment was unchanged from last year in the two remaining industries—financial activities and miscellaneous other services.

The seasonally adjusted unemployment rate in Santa Fe was 5.6 percent in May 2009, up from a revised rate of 5.0 percent in April. A year ago, the local area had an unemployment rate of 3.3 percent.

Santa Fe gained 300 jobs in May as a result of seasonal increases in three private-sector industries. Government employment did not change during the month.

The rate of over-the-year job growth for Santa Fe was minus 2.0 percent, representing a loss of 1,300 jobs. The Santa Fe job market has been weak for the last year and a half, so the recent data provide few surprises. Job growth has alternated between positive and negative territory, mostly staying close to the zero line. Some months have been better than others, but employment prospects in the local area have been fairly poor for a while.

The government sector reported 200 additional jobs, with gains at the federal and local levels. Employment at the state government level was unchanged. Educational & health services and leisure & hospitality were the only private-sector industries to expand over the year. Each also added 200 new jobs.

The largest drop occurred in construction, which was down 700 jobs. This performance is consistent with the current poor fortunes of construction in most other parts of the state. Six other industries also reported lower employment levels than a year ago. The information industry totaled 400 fewer jobs than at this time last year when a major production was filming. Retail trade was down 300 jobs, and the much smaller wholesale trade industry was down 100. Professional & business services reported 200 fewer jobs, while financial activities and miscellaneous other services were each down 100.

Two industries reported job counts that were unchanged from year-ago levels. Those industries were manufacturing and transportation, warehousing & utilities.