Unemployment Drops, But Jobs Report Also Shows Continued ‘Churn’ in Labor Market
New Hampshire’s unemployment rate fell in May to 2.5 percent, one of the lowest in the nation. But new data from New Hampshire Employment Security show the number of employed residents also declined last month on a seasonally adjusted basis.
The number of people looking for work also went down, a potential warning sign as businesses across numerous industries struggle to fill jobs as the economy regains its footing.
The number of employed residents fell by 710, while the overall labor force — a combination of employed residents and those looking for work — fell by 3,480 people, according to N.H. Employment Security. While the economy has rebounded significantly from the height of the pandemic, when unemployment topped 16 percent in New Hampshire, there are still 13,000 fewer people working now than there were a year ago, leading to hiring shortages that are impacting everything from restaurants to public transit to lifeguards.
There is still significant “churning” in the labor market, according to Annette Nielsen, an economist with N.H. Employment Security. “Some people may be leaving the market, some people are coming in,” Nielsen said. She expects continued fluctuations until the fall, when schools and campuses are expected to return to full capacity.
Nielsen added that as the ripple effects of the pandemic’s disruption on the economy subside, New Hampshire’s long-standing demographic challenges, led by an aging workforce and slow population growth, will continue to present challenges to robust hiring.
The leisure and hospitality sector added 1,200 jobs last month on a seasonally adjusted basis, according to N.H. Employment Security. But the professional and business services sector shed 1,600 positions, while the construction industry also saw 500 fewer jobs. Manufacturing hiring was flat for the month, while the education sector picked up 700 jobs.
Gov. Chris Sununu was quick to tout the report’s unemployment rate figure, sending out a press release saying the state’s economy was “roaring back to life.”
“Such low unemployment rates are no accident, but are the result of a continued effort to provide businesses with the flexibility needed to grow, while providing individuals with the incentives and resources needed to return to work,” Sununu said. “New Hampshire’s economy is well-positioned to make further economic gains throughout the year that will serve to benefit communities and families across the Granite State.”
In an effort to boost hiring, Sununu last month announced the state would reinstate a work-search requirement for those receiving unemployment benefits, and curtail most federal pandemic-related unemployment programs, including an additional $300 in weekly benefits. Sununu also launched an incentive program for anyone who obtains a job and holds it for eight weeks, offering $500 for part-time work or $1,000 for a full-time job.
In April, New Hampshire, along with Nebraska, South Dakota and Utah, had unemployment rates of 2.8 percent, while Vermont had the county’s fifth lowest rate at 2.9 percent. May’s jobs report will likely keep New Hampshire among the country's leaders.