Russ Steele
As we look to forward to Nevada County’s economic recovery, we need a tool set for measuring our progress. Writing in the latest issue of the Nevada County Business News, Gil Mathew makes an important point in his column Should We Be Reading Tea Leaves? Gil writes:
“And, speaking of reading the tea leaves. We watch the unemployment rate as though it can tell us a lot. The bloggers and news pundits and politicians wait with eager anticipation fro the next announcement of the unemployment rate, but I suggest that the better measure of the health of the workforce is to watch the measure of employment. If the number of employed people remains the same but the potential work force increases then the unemployment increases; conversely, if the number in the potential workforce decreases you have a decrease in the unemployment rate (although the same number of people are employed). So, population movement can have a huge effect effect on the unemployment number.”
Due to the space limitation on his column Gil did not give any examples. Here are some from the last few months that demonstrate the changes in the workforce numbers.
It is clear that the labor force has declined over the past three month, with the unemployment rate following this trend. The 2009 yearly average was 50,470, with an average unemployment rate 11%. In October 2009 the labor force was 49,630 which is 190 less that 2010. I would agree with Gil the most important economic indicator is the level of employment, not the unemployment rate.
Here is a broader look at the employment numbers:
As you can see the workforce follows a seasonal pattern. I will do some additional analysis using R a statistical programming language in an update to this post.
The Nevada County Business News tracks the employment at the top 50 employers in Nevada County. This could be a good indicator of Nevada County economic recovery strength. Here is the latest plot from the Business News:
As you can see, the graphic trend is not encouraging. I will continue to report this every two months when the data is published by the Nevada County Business News.
