A major question about the health of the Rochester labor market was answered this month—at the same time another potential uncertainty was created.
On March 17, the federal Bureau of Labor Statistics released revised employment data for 2016. The new figures showed that rather than losing an average of 300 private-sector jobs during the year, the metro area gained a net 5,100 jobs, representing a 1.1 percent increase from 2015.
Among upstate peers, Rochester’s revised job growth ranked behind only the Albany area (1.7 percent increase), while narrowly topping Buffalo (1 percent increase) and Syracuse (0.8 percent).
The positive swing was more consistent with other contemporaneous 2016 indicators that suggested Rochester’s economic performance was stronger than implied by the BLS’s initial employment estimates.
However, while eliminating ambiguity about the pace of 2016 hiring demand, the new data also raise another concern—that local job growth may be abruptly downshifting in early 2017.
BLS employment estimates for January and February, derived from a monthly survey of area employers, show a 0.3 percent (1,200 job) decrease in private jobs versus 2016.
This contraction differs from another less timely but considerably more robust labor tracking series, known as the Quarterly Census of Employment and Wages, which pegged private job creation at 1 percent in September 2016, the most recent time period available.
With the next Quarterly Census release not expected until mid-2017, the extent of the recent slackening in job creation will be unclear for several months.
Directional clues about where hiring demand may be headed can be seen on an industry-by-industry basis. Thus far in 2017, strong growth in health care employment is being offset by declines in manufacturing, education, hospitality and back office business services. These sectors will bear close scrutiny in the months ahead.
Gary Keith is vice president and regional economist at M&T Bank Corp.
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