Meet the Author

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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Meet the Author

Nelson Oliver |

Research Analyst

Nelson Oliver

Nelson Oliver is a research analyst in the Research Department of the Federal Reserve Bank of Cleveland. His primary interests include urban revitalization, housing policy, and applied microeconomics.

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02.24.12

Economic Trends

Fourth District Labor Conditions

Kyle Fee and Nelson Oliver

As of the end of 2011, the rate of unemployment in the Fourth District stands at 7.8 percent.  Typically, the Fourth District rate’s unemployment rate has been higher than the nation’s, but it now rests below the national rate of 8.5 percent. Over the past year, both the Fourth District and the United States as a whole saw the unemployment rate decline a marked 1.5 percentage points. Future improvements in the labor market may be subdued, however, due to changes in the Fourth District’s labor force.

The distribution of unemployment rates among Fourth District counties ranges from a low of 5.1 percent (Mercer County, Ohio) to a high of 15.5 percent (Jackson County, Kentucky), with the median county unemployment rate at 8.7 percent. County-level patterns reflect statewide unemployment rates. For example, as of December 2011, the unemployment rate was 8.1 percent in Ohio, 9.1 percent in Kentucky, 7.6 percent in Pennsylvania, and 7.9 percent in West Virginia. Compared to December 2010, all states within the District experienced declines in unemployment levels of nearly 1.0 percent or better.

There are significant differences in unemployment rates across counties in the Fourth District. Of the 169 counties that make up the District, 80 had an unemployment rate below the national rate and 89 counties had a rate at or higher than 8.5 percent. Roughly 28 percent of the District’s counties have a double-digit unemployment rate. This is a significant improvement from a peak of over 77 percent in October 2009, which indicates that the District’s labor market is improving. Geographically, unemployment remains the highest in remote areas of Ohio and Kentucky, while rural Pennsylvania has maintained a stronger labor market.

One reason to be cautious about the evident improvement in the District’s unemployment rate lies in the underlying dynamics of the Fourth District’s labor market. Recent changes may not be entirely due to recent economic factors but rather changing population demographics. Despite falling unemployment levels within the District, the District labor force declined by 1.0 percent, or 90,000 jobs, in 2011. Notable declines like these may call into question the true health of our District’s labor market. Going forward, if these participants return to the labor force, future labor market progress may be muted.