New Hampshire Labor and Economic Trends Presented to the New Hampshire Senate and House of Representatives Ways and Means and Finance Committees Concord, New Hampshire January 7, 2011 Bruce DeMay, Director Economic and Labor Market Information Bureau New Hampshire Employment Security (603)

Recent labor market and economic highlights New Hampshire has outperformed New England as a whole since the recession that ended in November 2001 The recent high level and longer duration of unemployment were linked to reduced hiring activity Unemployment has been declining through 2010 Unemployment Insurance Continued Claims are trending downward for both Regular Programs and additional, emergency federal UI programs The latest data on covered employment (2Q2010) shows that the over-the- year change from 2Q2009 to 2Q2010 improved over the change from 2Q2008 to 2Q2009 –Over-the-quarter changes from 1Q2010 to 2Q2010 also were improved compared to 1Q2009 to 2Q2009 Most recent Current Employment Statistics (CES) nonfarm employment shows wide-based improvement from November 2009 to November 2010 Alternative measures of labor underutilization are showing improvement

New Hampshire Labor Force growth has more closely tracked national growth than regional growth Labor force is heavily linked to population growth –New Hampshire population grew 6.5% from 2000 to 2010 –U.S. population grew 9.7% –Massachusetts population grew 3.1%

National employment began dropping a little sooner and more noticeably than New Hampshire employment – so the effect of the recent recession was felt later in New Hampshire Employment of New Hampshire residents has rebounded more quickly than in the US as a whole Employment of Massachusetts residents grew more slowly than the US – and was lower in November 2010 than in November 2001About 16% of New Hampshire workers work out-of-state Data from the U.S. Census Bureau’s American Community Survey 5-year estimates indicate that 84.0% of working New Hampshire residents worked in New Hampshire, while 16.0% worked out-of-state. This equates to about 1 in 6 working New Hampshire residents who work out-of-state. This share has been very stable at least back to –According to the 2000 U.S. Census, 84.4% of New Hampshire workers were working in-state, while 15.6% worked out-of-state. –According to the 1990 U.S. Census, 83.3% of New Hampshire workers were working in-state, while 16.7% worked out-of-state. About 7.0% of employed residents were multiple jobholders in 2009.

After the 2001 recession, New Hampshire unemployment changes paralleled the national trend Recent New Hampshire unemployment has dropped faster than the US and the rest of New England

New Hampshire had the fourth-lowest unemployment rate in the nation, 5.4% for November 2010 New Hampshire had the lowest unemployment rate in New England for November 2010 – NH – 5.4% –VT – 5.7% [5 th -lowest] –ME – 7.3% [14 th lowest] –MA – 8.2% [20 th lowest; tied with LA, TX] –CT – 9.0% [28 th lowest; ties with AL] –RI – 11.6% [47 th lowest (5 th highest); ranking includes DC] Even though the previous recession officially ended in November 2001, unemployment increased in 2002, and remained high in 2003 – long recovery

Total Unemployment in New Hampshire peaked in early 2010, and has begun to slowly taper off

In 2010, unemployment peaked at over 52,000 (seasonally adjusted) in January- February-March. Monthly unemployment is down over 10,000 since then. Unemployment measures more than just those receiving benefits. Continued Unemployment Insurance (UI) Claims in regular programs have been trending downward, with seasonal fluctuations Continued Claims in federally-funded emergency UI programs have begun to diminish For the 12 months through 3Q2010, the recipiency rate (the share of total unemployed receiving UI benefits) for Regular UI programs was 42%; the recipiency rate for all programs was 62%

For 2010Q3, there were fewer unemployed persons at each duration category, with the exception of the 52+ weeks of unemployment category Based on non-published data from the Current Population Survey

Estimated total employment by duration is based on non-published New Hampshire data from the Current Population Survey, conducted by the E.S. Census Bureau. The national recession began in November 2007, but New Hampshire did not feel the impacts as early, lagging the national experience by about 8 months. By 2008 Q3, unemployment had increased, but was still concentrated in the under 5 weeks and 5-14 weeks duration categories. By 2009 Q3, with the deepened recession, total unemployment to an average of about 50,000 for the quarter, with almost 2 in 5 unemployed for more than 26 weeks; 1 in 5 of the unemployed were unemployed for more than one year (52+ weeks). By 2010 Q3, average unemployment was around 42,000, with fewer persons unemployed at each higher duration range, except for the number unemployed for more than one year (52+ weeks). For 2010Q3, there were fewer unemployed persons at each duration category, with the exception of the 52+ weeks of unemployment category Based on non-published data from the Current Population Survey

Business Employment Dynamics data From quarter to quarter, total employment levels can be measured and compared to provide a snapshot of economic performance. But, the comparison of total employment levels over time misses the underlying dynamics of the labor market The Business Employment Dynamics data series is based on quarter to quarter changes in private sector employment at the firm level – and captures some of these underlying dynamics –Firms with higher employment from one quarter to the next provide “gross job gains” –Firms with lower employment from one quarter to the next provide “gross job losses” –Firms with no change in employment levels are not part of the dynamics picture Gross job gains minus gross job losses = net change in jobs

During the period between recessions, the normal job “churning” in the economy led to gross job gains from quarter to quarter in the 37,000 to 42,000 range Gross job losses were typically in the 36,000 to 40,000 range From quarter ending March 2008 on, gross job losses have been close to normal levels From quarter ending March 2008 on, gross job gains have been lower than normal levels – an indication that hiring has been low

During the 2001 recession, there were only three consecutive quarters where gross job losses exceeded gross job gains in the New Hampshire private sector (covered employment), followed by 6 quarters of mixed job changes – a long recovery period. During the recession and its aftermath, there have been nine consecutive quarters (through 1Q2010) where gross job losses exceeded gross job gains in the New Hampshire private sector (covered employment) – at least three of these quarters after the official end of the recession. The November 2007-June 2009 recession was sharp, and longer than the 2001 recession.

Over-the-year changes in covered employment have shown improvement for almost all industry groups

Over-the-quarter (1Q to 2Q) changes in covered employment have also shown improvement for almost all industry groups

How the different Measures of Labor Underutilization relate to one another

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