The U.S. economy is showing growing vulnerability focused in certain state and local job markets—beyond the impact of a Verizon strike that artificially depressed the latest employment numbers.
The job trends nationally and by state and local markets suggest that consumer spending is likely to moderate overall—but sustain pockets of local and regional strength—in May and through the summer months.
The expected moderation and pockets of strength will be especially true in discretionary goods, as suggested by the Spending Confidence Index™ (see here).
The strength and weakness will reflect these job trends:
- By State. Eleven states are registering flat or declining jobs growth in recent months. The weakness is related to oil industry job losses in the worst-hit states: North Dakota, Wyoming, Louisiana, West Virginia, Alaska, Kansas, Oklahoma, and New Mexico.
- By Metro Market. The major cities and metro markets are faring better. The worst-affected by the oil industry job losses include New Orleans and Houston. Most major local markets have been able to sustain at least slight growth from a year ago.
- Strong Markets. Amid the pockets of weakness, 13 states and 16 of the top 50 metro markets have been able to sustain strong job growth above 3.0% in recent months. Florida and California are among the biggest states sustaining strong growth.
These state and local job trends are largely hidden amid the overall jobs data for May, which primarily show the temporary impact of a labor strike at Verizon.
Total U.S. jobs grew by only 38,000 in May, which reinforces a trend of weaker job growth in recent months compared with gains averaging 200,000 at the end 2015 and the start of 2016.
Besides the Verizon impact, the May job weakness was driven by the job losses in energy and mining and related losses in manufacturing, construction, and wholesale trade.
See the table summary for more detail.
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