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Last year at this time, we were staring into an economic sinkhole, wondering if it had a bottom. In New Mexico, we’re usually spared the worst of downturns or there’s a delay in its impact, and this time we’ve seen both. Now, as we feel the monster’s tail lash our industries and our job market, it’s a good time to take stock.
When I say, “First, the bad news,” you can assume there’s some good news.
The state’s unemployment rate in August, the most recent available, was 7.5 percent, with 30,900 lost jobs over the year. That embraces everything from the 12.8 percent rate of Luna County to the 3.5 percent in Los Alamos County, along with the 8-plus percent of San Juan and Lea counties that reflect the slump in oil and gas. And the 9 and 6 percent rates in Taos and Santa Fe that say it wasn’t a great year for tourism, although Lincoln County’s 5.5 percent looks rosy by comparison.
For all that, we’re still better off than half the other states, with a national ranking of 25th in job “growth.” Talk about your glass half full. Nationally, unemployment was 9.7 percent.
The good news?
You already know the Dow Jones industrial average cracked 10,000. I’ve said before that the stock market isn’t rational, it’s emotional – it responds to fear and optimism. In March, the market thought the sky was falling; today it’s anticipating recovery.
The improving stock market does something else: As those ravished 401k plans start to bulk up, boomers will retire. Then the unemployment numbers will look very different. Employers can go back to worrying about the brain drain.
Experts are starting to say the worst is over. Consumers are returning to stores, savings rates are higher, credit card debt is down and homes are selling again. Lending is cautious but sensible. New Mexico banks may have too much bad debt still on the books, but they’re sound. Community banks, in fact, are in better shape than the mega banks.
And this year’s chile crop is a good one.
We can’t talk about what did happen without talking about what didn’t happen. A year ago there were so many dark predictions of a second Great Depression that I was inspired to point out that it wasn’t the 1930s.
We got a recession instead, which means that the unpopular bailouts either worked or helped. At the time it seemed only right for the organizations that created the mess to take their lumps, and if they died, they deserved to die. The trouble was, they would take commercial credit with them. It was that nagging detail that moved two administrations with vastly different philosophies to swallow the same medicine.
Still to come is the impact of stimulus funds. The state Office of Recovery and Reinstatement reports that $77 million in stimulus money spent so far provided work for 8,641 people, mostly in education, construction and law enforcement. We’re due $3 billion.
Something else that didn’t happen: Los Alamos National Laboratory didn’t disappear and none of our defense installations took big budget hits. Another proposal was that Los Alamos would be taken over by the military. When I asked Gen. Everett Thomas, commander of the Air Force Nuclear Weapons Center, about that back in March, he said, “We have a new administration recirculating old ideas. I don’t put much stock in it.”
In September, state labor economist Suzan Reagan, wrote in her department’s otherwise gloomy newsletter, “One thing is certain: This recession will end and the economy will recover and begin to grow again.”
She reminds employers that a lot of good people are looking for jobs right now. As the economy recovers, this nice labor pool will shrink. Employers should be thinking about life after the recession.
© New Mexico News