Finally, some good news for state’s economy
For New Mexico, average economic growth is very good news. Since the recession, the state has lagged the rest of the country — especially vivid when looking at the fact that New Mexico’s unemployment at 6.3 percent is the second highest nationally and neighboring Colorado at 2.4 percent has the second lowest.
The state also is one of just eight where employment levels haven’t returned to the December 2007 pre-recession level — there would have to be a boost of 10,000 more jobs statewide to reach that mark.
Jon Clark, an economist for the Legislative Finance Committee has dubbed the morass New Mexico’s “lost decade” of job growth.
But look at some recent numbers, and there is reason to believe that New Mexico might be headed for employment growth at or above the national average. Keep in mind, there is still a lot of uncertainty, and front and center is the continuing debate over the future of the Affordable Care Act, particularly the commitment by Congress and the Trump administration with regards to expansion of the Medicaid government insurance program, which accounts for $4 billion of federal spending in the state and with that, thousands of jobs. If the Medicaid program is curtailed or there are significant spending reductions, all bets for continued employment growth. In the meantime, however, here is the good news.
The number for first-time unemployment claims in New Mexico dropped below 800 last week, the lowest single weekly number since the summer of 2007. In presenting the data last week to a legislative committee, Clinton Turner, an economist with the Department of Finance and Administration, said the four-week average for unemployment claims is now the lowest in 17 years.
What it means is that businesses feel better about the future and are trying to keep their payrolls more robust, and fewer are closing or shedding workers. The state “is seeing some divergent growth,” Turner added, especially in the Rio Grande corridor between Santa Fe, Rio Rancho, Albuquerque and Los Lunas where the new Facebook data center is under construction.
A big help today is that the energy sector is no longer contracting, because of increasing activity in the southeast corner of the state, the Permian Basin.
In fiscal year 2016, the average rig count statewide was 33. That grew to 40 last year. Last week it stood at 68, more than twice the number from two years ago but still down from 2013 when the average was over 90 weekly rigs in New Mexico. Still, a more sustainable, modest increase in jobs is better than the boom-and-bust energy cycle so common over the past three decades.
Finally, it’s hard to see how New Mexico’s job growth leads the country in anything, but it actually happened for the one-month period between July and August 2017. The monthover-month gain for employment growth was 0.7 percent, about 5,700 jobs and first in the country, according to the U.S. Bureau of Labor Statistics. The growth is slightly ahead of New Hampshire, Maryland, Montana, Kentucky and Georgia — all states that also have been lagging the United States.
Once again, the monthly gain was led by construction, which added 1,300 jobs or 3 percent, the third-best growth rate in the United States.
New Mexico’s job growth over the previous year was 8,800 jobs, a gain of 1.1 percent on a seasonally adjusted basis, and just about the national average.
Make no mistake about it, New Mexico still has deep economic issues, with 31 of 33 counties — all except for Union and Los Alamos — showing an unemployment rate above the national rate of 4.4 percent.
But any sign that the state might finally be seeing some of the economic expansion enjoyed by the rest of the country is good news for both businesses and families.