Jobs are everything to an economy. Period. How you count jobs, however, can change the outcome of the winners and losers. In most circumstances economists look at the change year-over-year and also sequentially from the prior month. These two growth ranks can often be very diverse. What was hot a year ago maybe cold today. And vice versa.
Just look at North Dakota, for example, in which a year ago was posting some of the top percentage job growth numbers seen nationwide. In the latest 12 months, North Dakota had the 8th best job growth rate in the country at 2.91 percent. If you look at the last five years, they posted the best state job growth increase of 29.94 percent. But as oil prices have tumbled in the past year, the last six months saw just 0.58 percent total job increase, 36th best in the country (out of 51 since Washington, D.C. is included in the analysis). The state posted a job loss rate of 0.64 percent from February to March – or 50th best in the country, with just one state worse.
Naturally, long-term sustainable job growth is most preferred. To consider this, the table below includes the job growth rank by state for the past one month, six months, one year and five years as of March. Ranks were applied to each of those years, and the ranks were summed. The lower the overall sum, the better job growth performance has been for all four-time periods. Thus the index makes the latest one-month of job growth just as important as the past five years.
So which state topped this list in the Job Growth Index? Florida came in strong in first place. Florida’s lowest rank any of the four time intervals was 6th place – for five-year growth – with the remaining three periods placing 2nd, 3rd and 4th best. And the worst? West Virginia trounced the group placing 51st in each of the time intervals except the change from February to March 2015, in which it ranked 49th best.
The attached PDF details all of the underlying data for each of the time intervals.
Are the four time intervals utilized to create the Job Growth Index magical numbers that best explain true economic growth? Not really. They were selected to show the latest job growth measure (1 month), the last half year and full year, and five years as a longer-term anchor point, so to speak.
If alternative time intervals were used would the results change? For some markets, yes, and others no.
What the numbers do show is that some states, at least in the past five years, have been consistent producers of new jobs and that others have not. In between those extremes states, such as North Dakota, while posting impressive longer-term job growth rates have faltered as oil prices leaked away.
If you have any questions or thoughts, email back.
Jobs are everything.
Ted