Rust Belt Employment Up in August, but Job Growth Still Lags National Trend

Nationwide, the state with the largest unemployment increase in August was the Rust Belt state of Indiana (0.4 percentage points). California, New Jersey, Oregon and another Rust Belt state, West Virginia, each saw a 0.3 percentage point increase in unemployment. Over the last year, Indiana and West Virginia have experienced unemployment increases of 0.9 percentage point and 1.0 percentage point, respectively.

On the whole, Rust Belt employment in blue collar jobs rose by 3,100 (0.05 percent). The 3-month percent change averages over the past six months show some improvement in blue collar employment but job growth in these sectors still lags behind nonfarm job growth in these states.

While the construction sector, on the whole, gained jobs nationally last month, several Rust Belt states experienced job loss. West Virginia construction employment fell by 1.3 percentage points or 400 jobs. Iowa saw a decrease of 1.18 percentage points (900 jobs) and New York construction jobs fell by 0.69 percentage points (2,600). The biggest gainers were Illinois, which added 2,000 jobs for a 0.94 percentage point increase in employment; Ohio with a 0.91 percentage point increase (1,900 jobs); and Pennsylvania, which added 1,700 jobs. This is a change in trend in both Illinois and Pennsylvania, which both lost jobs over the past three months with decreases of 0.32 and 0.19 percent, respectively). All three states have lost construction jobs since January of this year (0.69 percent, 0.14 percent, and 1.94 percent, respectively).

Manufacturing in the Rust Belt grew slightly last month by 0.06 percent or 2,300 jobs. Nationally, manufacturing added more jobs than any other sector (36,000) in August. Michigan saw the greatest manufacturing growth with an increase of 0.68 percent or 4,100 jobs. This was followed by Ohio with 0.23 percent or 1,600 jobs and Pennsylvania at 0.14 percent or 800 jobs. At the other end of the spectrum, West Virginia saw a fall in manufacturing employment of 0.88 percent (400 jobs) followed by Illinois (-0.52 percent, 3,000 jobs) and Wisconsin (-0.11 percent, 500 jobs). After seeing several months of job loss in this sector, New York manufacturing employment increased by 0.05 percent in August. It is not clear that this marks a turnaround in manufacturing as employment in the sector is down an average of 0.28 percent over the last three months and 4.27 percent compared to last year this time. Since January, employment is down 7.9 percent.

Nationally, mining and logging employment was up in August led by gains in support activities for mining (6,800). Coal mining did not add any jobs in August (50,700) compared to July. It has gained 2,100 jobs since August of 2016. The Rust Belt state of Pennsylvania added 400 coal mining jobs over this time but just 100 have been added in 2017 (through July). The rest of the Rust Belt, however, lost jobs in mining and logging, down 0.44 percent or 400 jobs in August. No states in the region saw significant job growth in the month, with most states flat and four experiencing losses. Wisconsin saw a decline in employment in the sector of 2.5 percent, followed by Michigan with a decline of 1.33 percent, West Virginia with a decline of 0.46 percent, and Pennsylvania with a decline of 0.42 percent.

The overall story on blue collar jobs is one of modest growth, with some pickup in the August data. However, this pickup has not especially benefited the Rust Belt states that have historically been the backbone of manufacturing in the United States.