With tech companies from Alphabet to Zoom announcing combined layoffs of around 60,000 workers, unemployment is on the mind of many Americans. We reported on unemployment in the Rural Capital Area in October of last year. As a reminder, low unemployment is positively correlated with inflation. When unemployment is low, employers need to pay higher wages to attract workers. The increased cost of wages are generally passed on to consumers, resulting in higher costs for goods and services. At some point, if inflation gets too high, it can spiral into decreased demand and trigger employment layoffs, such as those recently demonstrated by tech companies in Silicon Valley. The question is, have these trends started to affect other industries and businesses outside of the tech scene?
While the RCA has historically had lower unemployment rates than the US, we predicted in October that the region would experience some uptick in unemployment due to the oncoming recession. So, has that prediction come true? The simple answer, not yet. As of November 2022, the unemployment rate was at 3.4, not far from the September low of 3.3. The line chart below shows that the unemployment rate has been largely stable since the beginning of 2022.
Figure 1: Unemployment Rate, RCA as Compared to United States
Furthermore, the total number of employed workers continues to rise, as shown in Figure 2. From January to November, the number of workers in the RCA grew 3.3%. At over 607K workers, the current employed workforce is larger than in was pre-pandemic. In a reassuring end to a turbulent 2022, so far employment in the RCA seems not only to be holding steady but also growing.
Figure 2: Total Employment in the RCA