Tuesday, September 10, 2013

The US Northeast region struggling with job growth

The US Northeast had weathered the Great Recession a bit better than the rest of the nation. In particular the region's labor market wasn't hit as hard.  The unemployment rate did not rise above 9%,  while the national rate was hovering around 10%. Part of the reason for this difference is that the Northeast's exposure to housing jobs had been lower on a relative basis. 

But as the unemployment rate fell nationally, the improvements in Northeast's labor market did not keep up. The region's unemployment rate is now at or even above the national level. 

More recently another indicator began to show relative weakness in the Northeast's labor market. The JOLT job openings rate published by the Bureau of Labor Statistics has stalled recently at the national level. But in the Northeast,  job openings have actually been declining. 

With sufficient labor mobility the two should converge over time. But underwater mortgages make moving difficult for many. 

For now the labor market indicators show the Northeast lagging the rest of the nation. Going forward it will important to see if this weakness is limited to the region or if it spreads nationally. 

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