The Numbers behind the Unemployment Rate

Last week, the Texas Workforce Commission released employment figures for May showing the Capital Area region’s unemployment rate increased from 5.8% to 6.1%. Because the rate had decreased the previous two months and has now increased again, I thought it might be a good time to take a closer look at the numbers.

The graph below shows how the unemployment rate has changed for the Capital Area region over the past two years. The most obvious observations are the two big spikes from April to June 2008 and from October 2008 to January 2009. From January to May 2009, the rate seems relatively stable. After all, there has always been some fluctuation from month to month, which begs the question whether these recent subtle changes are just data noise?

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The unemployment rate is calculated through a Federal-State cooperative program between the U.S. Bureau of Labor Statistics and the Texas Workforce Commission using estimates produced of the number of employed and unemployed. These estimates are derived from a model using a number of data sources including current and historical data from the U.S. Census Bureau's Current Population Survey and the Current Employment Statistics program, and State maintained unemployment insurance data. More about the methodology can be found here.

Even if the unemployment rate remained at a steady 4%, the number of unemployed in the Capital Area would still increase slightly because of the region’s growing population. The graph below shows this trend by looking at change in the number of unemployed each month compared to the number from the same time a year ago. This graph also shows the steady increase in the number of unemployed people in the late summer 2008 and continuing into 2009. As of April 2009, the number of unemployed people was 72% higher than April 2008. Since the percent change is calculated from a year ago, we start to see the graph heading downward. This should continue over the next few months unless additional layoffs occur. As CAPCOG continues to monitor economic conditions in the next few months, we’ll keep this chart updated.

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Likewise, the number of employed people in the Capital Area should increase over time if the unemployment rate is constant. For the most part, this pattern has occurred except during the period from October 2008 to January 2009 when we saw the big spike in the unemployment rate. As economic recovery happens, there should be an increase in these estimates. In fact, the latest numbers released show the highest number of employed people over all previous months in the last two years.

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One final note, if the labor force continues to increase at its current pace, we would need to have an increase of about 9,700 unemployed people to raise the unemployment rate by 1% (to 7.1%) in one months time. This type of increase has happened just once over the past 24 months from December 2008 to January 2009.

Below is a current employment summary for each county within the CAPCOG region. For more employment data, visit the Texas Workforce Commission.

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Chris Ramser

Economic Gardening: Growing Local Businesses

Mike Knutson over at ReImagine Rural posted some comments on economic gardening yesterday, including a brief video interview with Chris Gibbons. Chris runs the economic gardening program in Littleton, Colorado. He's also done more in the last 20 years to promote entrepreneurship-based economic development than anybody else in our field. Peruse their website, read about their results, and you'll see what I mean.

Most people in the economic development field today realize that a winning strategy must include a variety of approaches: recruiting, marketing, retention, entrepreneurship, workforce, and community development. Austin-Round Rock is fortunate to have organizations specialized in all of these various functions. But our ability to march together toward common goals will determine our position among leading U.S. regions. Brian Kelsey

Affordable Austin

BusinessWeek published an article called Affordable Austin last week, detailing comparisons between Austin-Round Rock and a few of our peer regions like Portland and San Francisco. Here's a map showing where people came from who moved to Travis County in 2006. We generated the map using county-to-county migration records from the IRS. Click on the image for a larger version. We'll be getting the 2008 data as soon as it's available so stay tuned for an update on this topic. Also, check out a story we did last year on people moving to Austin from California.



Brian Kelsey

Unpacking Unemployment Data

Michael Mandel at BusinessWeek writes frequently about how different segments of the labor market--college-educated, people with high school diplomas, etc.--are faring in the recession we've experienced over the last 18 months. Check out his latest post called Which Educated Workers Are Unemployed? to get a sense for how this data can be used. We did a trial run using similar unemployment data for Travis County with Workforce Solutions Capital Area recently. Later this summer we'll be exploring ways to provide that information on a monthly basis.

New City Population Estimates Coming July 1st

The U.S. Census Bureau will be releasing new estimates for city populations on July 1st. The latest data will cover the July 2008 time period. We'll post the data here for the cities in the Capital Area, along with some analysis. Stay tuned.

Career Clusters

Seedco published an interesting report last month called A Tale of Two Systems: Linking Economic Development and Workforce Development. Promoting collaboration among economic development, workforce training, and education has been a cause du jour for some time, and I'm glad to see researchers weighing in with case studies of actual projects. Hopefully one day somebody will take a look at what's going on in Texas.

We tackle this challenge in a slightly different way. In addition to running committees that involve people from economic development, workforce development, and education, one of CAPCOG's primary roles is to create information--data sets, maps, presentations, this blog--that provide opportunities for collaboration. For example, we've partnered with Workforce Solutions Rural Capital Area to provide labor market information tied to Career Clusters, which form the basis of career and technical education programs in secondary schools. Here's a table showing the 16 federally-defined Career Clusters and the job outlook for the Capital Area between 2009 and 2014. Click on the image for a larger version (source: EMSI).



School districts can use this information in several ways: (1) to prioritize career and technical education course offerings based on regional labor market trends (e.g., which Career Clusters give our students the greatest opportunity to find a well-paying job in a growing field?); (2) to emphasize the connection between secondary education and workforce availability (which can be very helpful for encouraging businesses to offer internships, job shadowing, etc.; and (3) to help students understand career options after high school, regardless of whether or not they decide to pursue postsecondary education immediately.

Brian Kelsey

Yuppies, Burbs, and Hippies, Oh My!

Ben Philpott at KUT is talking market segmentation on his blog today. Visit Notes from the Lege to read about a new national research project called Patchwork Nation and then read CAPCOG's article on Central Texas called Yuppies, Burbs, and Hippies, Oh My!, by Sean Moran.

Austin-Round Rock Gained Jobs in April

The U.S. Bureau of Labor Statistics released preliminary April employment data for U.S. metro areas today. Total non-farm employment in Austin-Round Rock (Bastrop, Caldwell, Hays, Travis, and Williamson counties) increased from 776,500 jobs in March to 781,400 jobs in April. This marks the third consecutive month of net job growth in the region (not seasonally adjusted).

Notably, employment in goods producing industries in Austin-Round Rock was down by only 500 jobs in April, which is encouraging given the pace of recent losses. Other good news: consumer spending may be stabilizing (retail, hotel, and restaurant jobs are all up from this time last year) and professional and business service sector employment is back to its all-time high last seen in October 2008.

Some bad news: computer, semiconductor, and other electronic component manufacturing continues to slide. Semiconductor manufacturing employment in April was 15,700 jobs, which virtually erases all the gains since April 2006.

Brian Kelsey

Technology Regions

Ross DeVol discusses the Milken Institute's latest study of North America's High-Tech Economy over at Newgeography. This latest edition includes Mexico, which needs to be part of any discussion about the future of regional economies in Texas. Austin-Round Rock ranks 20th, and the authors call it "arguably the quintessential 21st-century knowledge-based community." No argument here.

Brian Kelsey