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Kyle Fee |

Economic Analyst

Kyle Fee

Kyle Fee is an economic analyst in the Research Department of the Federal Reserve Bank of Cleveland. His research interests include economic development, regional economics and economic geography.

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09.03.09

Economic Trends

Fourth District Employment Conditions

Kyle Fee

The District’s unemployment rate fell 0.1 percentage point to 10.1 percent for the month of July. The decrease in the unemployment rate is attributed to a decreases in the number of people unemployed (−0.6 percent), the number of people employed (−0.4 percent) and the labor force (−0.2 percent). Compared to the national rate in July, the District’s unemployment rate stood 0.7 percentage points higher and has been consistently higher since early 2004. Since the recession began, the nation’s monthly unemployment rate has averaged 0.7 percentage point lower than the Fourth District unemployment rate. From the same time last year, the Fourth District and the national unemployment rates have increased by 3.6 percentage points and 3.6 percentage points, respectively.

There are significant differences in unemployment rates across counties in the Fourth District. Of the 169 counties that make up the District, 32 had an unemployment rate below the national rate in July and 137 counties had rate higher than the national rate. There were 122 District counties reporting double-digit unemployment rates in July. Large portions of the Fourth District have high levels of unemployment. Geographically isolated counties in Kentucky and southern Ohio have seen rates increase as economic activity is limited in these remote areas. Distress from the auto industry restructuring can be seen along the Ohio-Michigan border. Outside of Pennsylvania, lower levels of unemployment are limited to the interior of Ohio or the Cleveland-Columbus-Cincinnati corridor.

The distribution of unemployment rates among Fourth District counties ranges from 7.0 percent (Allegheny County, PA) to 19.5 percent (Magoffin County, KY), with the median county unemployment rate at 11.9 percent. Counties in Fourth District Pennsylvania generally populate the lower half of the distribution while the few Fourth District counties in West Virginia moved to the middle of the distribution. Fourth District Kentucky and Ohio counties continue to dominate the upper half of the distribution. These county-level patterns are reflected in statewide unemployment rates as Ohio and Kentucky have unemployment rates of 11.2 percent and 11.0 percent, respectively, compared to Pennsylvania’s 8.5 percent and West Virginia’s 9.0 percent.

An alternative measure of labor market conditions is the U-6 rate, which serves as an estimate for labor underutilization. Often labeled “true unemployment,” the U-6 rate counts total unemployed persons, part-time employees and all marginally attached workers as a percentage of the civilian labor force plus all marginally attached workers. The U-6 measure also supports the hypothesis that labor market conditions differ markedly across the Fourth District.