Louisiana appears to have dug its way out of recession, reaching a three-year low in its unemployment rate as the state finally shows job gains after being hammered by the downslide in the oil and gas industry.
"My story has been Louisiana in recession, but I'm changing my story. I'm saying Louisiana's in recovery or starting," said Greg Albrecht, the Louisiana Legislature's chief economist.
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But while the economic picture seems to be improving, the upswing remains slow.
Louisiana continues to have the third-highest jobless rate among states, a seasonally adjusted rate of 5.5 percent for June, compared to a national rate of 4.4 percent. And Albrecht warns the job growth is barely reaching positive territory, still "bouncing around" zero.
"We need positive growth, not just less negative, and we seem to be getting that as we've gotten into 2017," he said. "Is it sustained, strong? Not yet."
Still, Gov. John Bel Edwards cheered the latest unemployment report, saying the jobless rate has dropped from 6.2 percent when he took office in January 2016 and the current 5.5 percent figure is the lowest since February 2014.
"Louisiana's economy has been struggling for quite some time, but all signs show that we are making significant progress," Edwards, a Democrat, said in a statement. "The unemployment rate is going down and job creation and job growth are increasing. We're still not where we need to be, but we are headed in the right direction."
Louisiana had seen declining private-sector employment since August 2015, with the greatest job losses coming in the oil and gas, manufacturing and other high-wage sectors. At one point, the number of people working in the mining sector, which includes the oil and gas industry, had fallen by nearly one-third. But Albrecht said those overall drops have declined, and the state recently has seen some months of positive job growth.
The state appears to be getting impacted positively as the rest of the country's economy chugs along, and the job losses in the oil and gas industry appear to have bottomed out, he said.
Employment in higher-wage areas like manufacturing, construction and professional services are beginning to improve, though oil and gas employment — Louisiana's highest-earning wage sector — hasn't started to bounce back.
Stephen Waguespack, president of the Louisiana Association of Business and Industry, said he was glad to see better job numbers, but warned the excitement should be tempered. He worried about the continued slump in the oil and gas industry and its effect on service sectors and the cyclical nature of the jobs driving Louisiana's improved employment picture.
"Any good news is great, but I'm still very concerned with the state of the economy. The gains we're seeing, they're largely in construction. My concern is when those big construction projects taper off, what happens then?" Waguespack said.
The extended months of continuing dips in employment hammered personal income, sales and business tax collections for the state, as people and companies earned and spent less money. That worsened Louisiana's financial problems.
While the lessened unemployment and positive job growth could mean an uptick in some tax collections, it's not expected to be enough to close the more than $1 billion budget gap forecast to hit the state in mid-2018, when temporary taxes enacted by lawmakers expire.
"Is that going to fix our revenue hole problem? Not even close," said Albrecht, who sits on the state income forecasting panel.
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