By Nicole Maxwell, NM Political Report
The municipal trees are lit, the yule log roars and the end of year discussions about what exactly happened this year are upon us.
One of the biggest discussions is always the economy, including the number of new jobs and inflation and unemployment rates.
The good news is more people are working.
“Right now, we have the highest size of our civilian labor force that we’ve actually seen on record, which is great,” University of New Mexico Associate Professor of Finance Reilly White told NM Political Report. “The physical number of unemployed people that we have has been ticking on board as well, and that it’s still near what we would call 50-year lows. But following the trend of the rest of the country, the unemployment [rate] has been rising [in] New Mexico… since we bottomed out back in August of 2022.”
The December unemployment and jobs reports show how the economy at the county, state and federal levels are doing, following a few years of a recession’s aftermath, a global pandemic and workforce changes brought on by both.
The unemployment rate for October, the most recent data, shows that New Mexico’s current unemployment rate is 4.3% with 42.074 unemployed people filing for unemployment insurance, 936,996 people employed of a total 979,070 person workforce, according to the DWS.
The unemployment rate is higher than October 2023 which had a 4.0% unemployment rate, but smaller workforce at 967,820 people and 38,457 of those filing for unemployment, according to DWS.
The November Employment Situation Report was issued by the U.S. Bureau of Labor Statistics on Dec. 7.
The report showed that employment rose by 227,000 nonfarm payroll jobs in November with a 4.2% federal unemployment rate.
“Employment trended up in health care, leisure and hospitality, government, and social assistance,” the report states.
There were fewer jobs in retail trade, the report states.
The federal unemployment rate was only a small change from October’s 4.1% rate.
From COVID-19 and beyond
The COVID-19 pandemic was nearly five years ago and its economic effects are beginning to wane.
The unemployment rate in New Mexico peaked in May 2020 at 9.3% and has since come down to 4.4% according to data from the New Mexico Department of Workforce Solutions as of Dec. 17. The state unemployment rate bottomed out at 3.4% in August 2022.
To combat the recession triggered by the COVID-19 pandemic, the federal government passed a $5 trillion stimulus spending package.
“Which was excellent for helping us get out of that. Consumer spending roared back. Inflation came with it. But as a consequence we saw businesses hire, hire, hire, hire and then we got our unemployment rate,” White said. “Since we had all that stimulus money floating around and not enough places to put it, we got inflation at the same time.”
There were two jobs available for every worker at the time which caused the job market to weaken, White said.
“We had a large number of (job) openings since that time, the unemployment rate was relatively stable until roughly summer of last year, in June, we were still at about 3.6% and since that time period has been kind of a slow and steady upward hint for New Mexico,” White said.
The relative economic stabilization comes with warning signs, such as the having more long-term unemployed, White said.
“These are people who have been unemployed for months and months and months, and we’re seeing that some sectors, in particular, like tech, have had trouble when people are laid off, people are not getting those jobs back,” White said.
It’s a New Mexico thing
New Mexico tends to have a slower job turnover than most states due to us hiring and firing slower than in other states, White said.
“What that means is, in something like, if we go back to the 2008 Great Recession, it took us a long time as a state to [recover]. We didn’t see the double digit unemployment that other parts of the country do. We reached 9% but we didn’t see double digits,” White said.
Another difference in New Mexico is its large public sector workforce.
“We have a workforce that doesn’t have a lot of really big companies in it, and so you don’t see those mass layoffs that you see in other states, but it does adversely affect us and the recession we saw in the Great Recession and in COVID we saw unemployment rise, but it took a very long time for us to us to recover,” White said.
New Mexico is also attractive to people who have retired and, having done their time, do not wish to rejoin the workforce.
Which means New Mexico is not attracting core workforce aged people– 25-54 year olds — the way other states do, White said.
In fact, “we actually have negative outgrowth in that sector. So people are often leaving us… which is somewhat discouraging,” White said.
Larger, publicly-traded companies have come to New Mexico or were formed here, but they generally do not stay long, such as Microsoft, which was founded in 1975 in Albuquerque and is now headquartered in Washington state.
“We can’t get the bigger companies to stay here. We get Microsoft to be founded here, but not stay here, right? So we have this history of not cultivating larger companies here, and larger companies have that effect of building an ecosystem around them, and we just haven’t been able to get that off the ground,” White said.
Note: This story has been updated to reflect correct employment numbers.