Unemployment a Real Bone in Our Throat

Unemployment continues to rise.

New Mexico's October rate was 7.9% -- up .2% over September. Over-the-year job 'growth' was -3.3% and that translated to a loss of about 27,800 jobs during the year. It is hard to recall that just two short years ago the unemployment rate was 3.5%.

The only areas of growth were health services, government and information (from our still-active movie industry).

Not to be outdone, Albuquerque's rate was even worse at 8.2% -- representing the same.2% increase see by the state as a whole. For the year, job losses totaled 14,800.

Only two areas showed growth in this region: health services and government.

Well, maybe...

Business Week, using data from the Brookings Institution, has decided that Albuquerque is among the 40 cities that have been least effected by the recession. Another one of those 'depends on where you are' articles. One thing they did get right without question: all the noted cities had one thing in common - home prices that never got too high or too low.

But -- looking at the facts 'on the ground' the picture is not particularly cheerful.

New Mexico unemployment was 7.7% in September - up from 4.4% for the same month in '08.

Albuquerque/Rio Rancho unemployment was 8% -- up from 4.6% in September of '08.

That is the first time in my memory that this area has had higher unemployment numbers than the state as a whole.

Most worrisome is that job growth is at a 66-year low for the state with no real sign of a turn around yet. Were it not for increases in the government and health sectors, the numbers would be even worse.

House Construction

My thanks to Michael Murphy, whose SalesTraq company keeps a close watch on home builders in the Albuquerque/Rio Rancho area. Here is his history of housing starts... not a pretty picture. (The data reflects each year through August):

1995 = 3,221 permits

1996 = 3,268 permits

1997 = 3,232 permits

1998 = 3,438 permits

1999 = 3,594 permits

2000 = 3,281 permits

2001 = 3,964 permits

2002 = 3,918 permits

2003 = 4,549 permits

2004 = 4,892 permits

2005 = 4,706 permits

2006 = 4,088 permits

2007 = 2,933 permits

2008 = 1,596 permits

2009 = 1,061 permits

And, as he points out... we have had the stimulus package in place this year. Ouch!

Moving in Lockstep - Wrong Direction

The good news? New Mexico and Albuquerque/Rio Rancho continue to outperform the nation.

The bad news? That doesn't matter... we are deeply in the hole regardless of what the rest of the country is doing.

U.S. Unemployment Rate: 9.7% in August

New Mexico: 7.5%
Albuquerque/Rio Rancho: 7.4%

Year-To-Year Job Loss

New Mexico: 30,900
Albuquerque/Rio Rancho: 14,500

We have to go back to the mid-40's to find a similar decline in jobs. And, in a state where job growth is traditionally in the 1-2% range, it will take us a long time to get back to a level playing field.

July Unemployment

Unfortunately no surprises -- not much change.

The percentages continue to look better than most of the country and continue to be lousy on an absolute basis. Both New Mexico as a whole and the Albuquerque/Rio Rancho data paint a picture of a work force that has a long way to go to return to normalcy.

New Mexico
2009 July unemployment was 7% -- up from 6.8% in June
2008 July unemployment was 4.2%

Albuquerque/Rio Rancho
2009 July unemployment was 6.8% -- the same as in June
2008 July unemployment was the same as the state as a whole: 4.2%

In both cases, the only sectors performing well are Education/Health Care and Government. All others are in negative territory. And that, of course, means none of the 'building blocks' for a sustained rebound are in place.

Some Good News

Eclipse... the light jet company that went into bankruptcy earlier this year will be starting up again. Much smaller, but still plan on hiring back about 200 people by the end of the month.

Also, the US Forest Service will be adding/transferring about 140 additional jobs to Albuquerque in the near future.

Not Much Change In A Lousy Picture

As I have kept saying, we may be doing better than most states but the unhappy fact is that New Mexico and Albuquerque/Rio Rancho are not climbing out of a very deep hole. New Mexico's overall rate of unemployment inched up again while Albuquerque/Rio Rancho's fell slightly. But, both are more than 2.5% higher than this time last year. And, were it not for two sectors (government and health care) the figures would be much worse.

New Mexico unemployment:

• 6.8% this June
• 6.5% in May
• 4.1% last June

Albuquerque/Rio Rancho unemployment:

• 6.8% this June
• 7.0% in May
• 4.1% last June

In 'real people' terms, that means 26,400 jobs have disappeared in the state, of which 10,700 were within the Albuquerque/Rio Rancho area.

It's Nasty Out There

When you remove all the very accurate statements about 'everyone else is worse off', you are left with our reality: a steadily mounting percentage of unemployment and a level of negative job growth that has not been seen in 50+ years.

• New Mexico's May unemployment level is 6.5%
• May of 2008 was 4%
• Job growth during the same time frame was a negative 2.4%

The Albuquerque/Rio Rancho area -- normally much better than the rest of the state -- isn't doing any better this time.

• The unemployment rate was 7% this May.
• May of 2008 was the same as the state's rate of 4%
• Job growth(?) also is worse than the state as a whole at a negative 2.9%.

Yuck! Anyone who things we are out of the current recession is smoking a controlled substance.

You Should See the Other Guy...

One more list that shows Albuquerque is terrific shape -- relative to the others.

The Brookings Institution looked at the nation's top 100 metropolitan areas and concluded that we had the 15th strongest economy during the first quarter of the year. Employment, unemployment rates, wages, gross metropolitan product, housing prices and foreclosure rates were all factored into the study.

But, like the vast majority of the cities in the study, we have not begun to turn the corner, just slowed the downward spiral. In fact, only one metro area (McAllen, TX) saw growth in both employment and gross output during the first quarter.

A long way to go....

Some Signs of Life

Three glimmers of light in the midst of this murky economy:

• UNM is starting a $23 million sceince/math building
• General Mills has broken ground on a $100 million expansion
• Solar Array's first phase (at $170 million) of construction is set for the fall

All mean construction jobs, of course, but also new hires at a time of true stagnation.

Unemployment Flattens Out

Some good news for a change (beyond being a Kiplinger 'hot city'!). Unemployment may have peaked in the region, well below the national average.

• New Mexico's rate for April was 5.8% -- a slight drop from March's 5.9%
• Albuquerque/Rio Rancho looks even better. April shows 6.3% vs. 6.6% in March.

Both compare very favorably with the national average of 8.9% for April.

But, before turning cartwheels down the street, it is worth remembering two more sobering statistics:

• Last year's April rate was 3.9% for the state and 3.7% for Albuquerque.
• We continue to have negative job growth in both the state and the Albuquerque/Rio Rancho area. While that continues, not much hope for any sustained improvement.
  

A Good List to Rank High

Have not seen one of these for awhile - probably because all cities ranked so low it was embarrassing :)...

Kiplinger's Personal Finance magazine has Albuquerque ranked #2 for its "10 Best Cities of 2009". It noted both our growing film industry and the success we have had attracting companies like Schott North America in the solar-energy industry.

Unemployment Inches UP -- Again

No surprise... we continue to do better than the rest of the country. But, what we do have is about as bad as it has been for more than 50 years.

For the state as a whole:

• Unemployment was 5.9% in March vs. 3.9% for March of '08.
• Over-the-year job growth was (1.9%) and that translates into over 16,000 jobs lost.
• 1954 was the last time the state's job growth was this bad.
• Just 2 of 13 industry classes posted gains: health care and government.

The Albuquerque/Rio Rancho picture is no prettier:

• Unemployment was 6.6% in March vs. 3.8% a year ago.
• Over-the-year job growth was (2%) -- subtracting 7,700 jobs from the local economy.
• Just 3 of the job classes posted gains: health services, government and information (which is the classification for the growing film industry in the area).

And, believe it or not, our data puts us in a very favorable light vs. other states. We ranked 12th vs. other states. (Only three states and the District of Columbia were in positive territory.)

Yuck!

But you should see the other guy...

Once again, employment figures for New Mexico and the Albuquerque/Rio Rancho area are less than thrilling... and far better than most. For February:

• 5.4% for New Mexico as a whole... up from 5.1% in January. Nationally the figure for February is 8.1%
• Albuquerque/Rio Rancho lifted to 5.8% from 5.5% in January.

Job growth is the other area we are 'out-performing' most of the country:

• Over-the-year job growth for the state was a negative 1.4%. Only six states reported any growth at all. But, again, for an area that normally has very little fluxuation, the past year has been worse than any in 17 years.
• Albuquerque/Rio Rancho lost 4,800 jobs -- a drop of 1.2%.
  

February New Home Starts

A small surprise... Rio Rancho permits rose 54% over January for a total of 93.

Albuquerque continued to lag. Only 31 permits were pulled for the entire city.

Most of the permits were for outlying subdivisions so sprawl is still happening... just at a slower pace. My guess is that trend will continue with the availability of up to $8,000 in stimulus money for a home buyer. That is certain to draw a number of first-time buyers into the market and many of those buyers will purchase entry level homes.

Looking Good (In Comparison)

January unemployment statistics are finally out. (I suspect the short month is partly responsible for the delay -- as well as needing to fill requests from the legislative branch which is in the middle of its 60-day session.) As usual with statistics, how you look at them matters a great deal.

• New Mexico's rate is 4.7% while the national rate is 7.6%.

Looks pretty good until you see the steadily increasing local numbers:

• In January of '08, our rate was 3.8%.

Far more damaging, however, is the rate of job growth. Over the past year we are at a (1.0%). That is the first year of negative growth since 1991 -- more than 17 years ago.

The Albuquerque/Rio Rancho area unemployment data mirrors the state:

• January '09 rate is 5.5%
• January '08 was 3.7%
• Job growth was (0.9%). That is the fourth month in a row of year-to-year negative numbers and the rate of decline has been accelerating.
  

Win Some... Lose Some

Intel announced an additional 50 layoffs; Sprint is hiring 40 more. Both in Rio Rancho... but unfortunately not at the same wage level, I suspect.

January Housing Starts

Not much to write home about... and I am sure that is no surprise to anyone.

The entire metro area totaled just 96 permits for January. That is better than December, when only 81 permits were requested. But, it is a far cry from January of '08 when 169 permits were obtained.

Stimulus Package

Initial estimate is that the package will create 22,000 jobs in the state. Where and when, of course, are still to be determined. And, just as important as those two questions is the third one: longevity. If the jobs are temporary 'hits' for construction projects, for example, they will do nothing to address the confidence issue that I think is holding back everyone from purchasing any big ticket items.

Good News for a Change

Intel just announced it will be spending $2.5 billion to upgrade its facilities in Rio Rancho. They intend to use the upgraded 'fab' to manufacture its next generation chip technology.

That is a stimulus package all by itself! From past history, once Intel decides to do something, they are very fast to get going. My guess is that most of that money will be spent in the next 12 months which means about 1,500 construction jobs will be added to the local economy. Since construction is one of the sectors that is hurting the most, that is welcome news indeed.

A Mostly Negative Picture

The December unemployment picture isn't pretty. The only remotely positive statement that can be made is that we are (still) better off than most. While the national unemployment rate is now at 7.2%, New Mexico was 4.9% in December with Albuquerque/Rio Rancho at 5.3%

Sounds pretty good except that one year ago, the figures were 3.2% for New Mexico and 3.4% for Albuquerque/Rio Rancho.

The only areas of growth are in government and education/health services. (Statewide, mining is still showing growth but anticipated layoffs due to the drop in oil prices will erase those gains.)

Every other sector is showing negative numbers: manufacturing, construction, leisure & hospitality, retail, financial and transportation.

Not much to cheer about.