The unemployment rate continues to drop in New Mexico and last month was no exception.
According to data released Tuesday by the New Mexico Department of Workforce Solutions, the unemployment rate came in at 3.9% in December — a nearly 15-year low and the lowest rate in 2022. The last time New Mexico’s unemployment rate stood at 3.9% came in April 2008, state data shows.
New Mexico’s unemployment rate continues to trend closer to the national average, which was 3.5% last month and had tied for a 53-year low, according to federal data.
In a statement, Gov. Michelle Lujan Grisham called the unemployment rate – which the state says is the largest year-over-year decrease in the unemployment rate across the nation – is a good sign for New Mexico.
“It’s crystal clear — our economic investments are working and jobs are growing,” she said.
Deep dive
The state’s unemployment rate — which measures the percentage of the labor force that is unemployed and is actively applying for work – dropped each month or remained the same with the exception of October, when the rate had climbed to 4.3% from 4.2% the previous month.
Data shows December’s unemployment rate is a drop from 4.1% in November and from a high of 5.9% at the beginning of the year.
December’s number is also largely different from the rates in 2020, when unemployment had hit a new high during the onset of the COVID-19 pandemic and when many businesses were closed and forced people out of jobs. At the time, the unemployment rate had reached a high of 9.8% in May 2020.
Reilly White, an associate professor with the University of New Mexico’s Anderson School of Management, told the Journal the unemployment rate has followed the same trend as that seen at the national level, for the most part coming in lower each month.
But he said the “nature of the workforce is changing,” in New Mexico with fewer government workers compared to a decade ago and an increase in workers in other areas such as education. That drop in government workers, along with the loss of workers in other industries, coincides with New Mexico’s low labor force participation rate – which stood at 55.7% in December – he said.
“This is due to a number of factors, especially increased retirements,” White said. “Despite the oil boom bringing in record revenues to state coffers, employment in the cyclical mining and logging sector is 27% lower than at the end of 2014.”
Year-over-year data shows, though, that some sectors are recovering. Mining and logging, for instance, grew by 1,800 jobs. Manufacturing added 700 jobs year over year and construction added 2,500 jobs. Large increases have also come in education and health services, as White pointed out. In the last year, that sector grew by about 6,200 jobs, or 4.4%, the data shows. Leisure and hospitality also grew by about 5,000 jobs – a trend that held for much of last year.
County by county
Non-seasonally adjusted rates for unemployment show that more dense counties — including Santa Fe, Doña Ana and Bernalillo — tend to trend lower than in less populated counties.
Bernalillo County, for instance, had an unemployment rate of 3% last month, the data shows, while Santa Fe County dropped to 2.8%. Doña Ana County saw its unemployment rate drop from 4% in November to 3.7% in December.
In Eddy and Lea counties, where oil and gas drilling operations reign supreme, the unemployment rate stood at 2.5% and 3.7%, respectively.
Luna County had the highest unemployment rate in the state last month at 11.6%, an increase from 11.1% in November. The lowest rate was in Los Alamos County at 1.5%, according to the data.
Looking ahead
White, who also serves as an associate dean of teaching and learning for the Anderson School of Management, said New Mexico doesn’t follow the same trends as other states, mainly because of the large population working in government and the lack of large companies with work forces stationed in the state.
“We have few large companies and a larger amount of government employees than other states, so large layoffs are uncommon,” White said. “Although we feel recessions less than other states, it takes us longer to recover.”
But White said if — or when — New Mexico enters a recession, unemployment will likely rise and taxes received by state and local governments will shrink with people spending less money.
“It’s still too early to determine when or if the layoffs in the tech sector will spread to other industries,” he said. “Construction, retail and manufacturing employment are often hit hard by recessions. … How severe the recession will be ultimately depends on the response from the federal government and the Federal Reserve.”
Source: “New Mexico’s unemployment rate has dropped to the lowest level in nearly 15 years“
