On June 1, the latest window into the national employment
situation will open when the Bureau of Labor Statistics releases
its May report on job growth. In the meantime, the
BLS's latest look at regional employment
has provided some insight into where conditions are getting better
-- and where they are getting worse.
The insights in the report indicate not only where jobs are
plentiful, but also where banking conditions may be getting better
or worse. In fact, the potential link between employment and
banking conditions, such as rates on savings accounts and the
availability of mortgages, may be especially strong when viewed on
a local level.
After a promising start to the year, the U.S. has now seen two
disappointing employment reports. The net number of new jobs
nationally slumped from 259,000 in February to 154,000 in March and
then 115,000 in April.
A state-by-state breakdown of job growth shows that this is not
indicative of a universal weakening in the job market. Instead,
there are sharp contrasts from one region to the next.
For example, three states -- Nevada, Rhode Island and California
-- are still wrestling with double-digit unemployment rates.
California, at least, is still adding jobs at a reasonably healthy
clip, joining Texas and New York as the only three states to have
added more than 100,000 jobs in the past year.
In terms of more recent trends, Indiana was the big employment
gainer in April, adding a net total of 17,100 jobs for the month.
This contrasts with Maryland, which lost 6,000 jobs during the same
month -- the most of any state in the union.
The connection to banking
Generally speaking, employment may be the most important
indicator of the economy's health right now. With the government
swamped by debt, there is little hope that additional fiscal
stimulus will spark the economy. Individuals also are grappling
with high debt levels, so it will take more than consumer
confidence to fuel a sustainable economic recovery. Only putting
more people back to work can provide the type of broad-based income
boost that the economy needs.
From a jobs perspective, employment trends are especially
significant on a local level. After all, most people don't look for
jobs nationally -- they tend to focus on their local area.
State-by-state employment trends help people know whether
conditions in their area are getting better, or if they should
State-by-state job trends can also tell you something about
local banking conditions. A healthy job market is key to supporting
a healthy housing market, which in turn is likely to mean mortgages
are easier to obtain. Also, job growth indicates business
expansion, which creates the type of thriving lending environment
that gives banks the incentive to offer
higher interest rates on savings accounts
On a state-by-state basis, recent employment trends have been a
study in contrast. The good news, though, is that there are still
more states where jobs are growing rather than shrinking.