by Eric Peterson, Director of Policy
During the holiday season, Louisianans have more on their mind than the latest state economic reports. Yet as we enter the New Year, it’s important to understand where our state’s economy stands.
Two reports, one from the Bureau of Labor Statistics (BLS) and the other from the Bureau of Economic Analysis (BEA), add important insights to this critical question.
First, let’s start with the good news from the BLS. There are slightly more than 23,000 fewer unemployed workers in Louisiana in November 2020 than the previous month. Approximately 18,500 jobs were added, with 9,400 of those jobs coming in the leisure and hospitality sector. This addition led to a decrease in the state unemployment rate from 9.4 to 8.3 percent.
But not all of the decrease in the unemployment rate was due to unemployed people finding work. The civilian labor force, or those who have a job or are actively looking for a job, decreased by 21,400. When the civilian labor force decreases, this means there are fewer people counted as unemployed despite many of those people wanting to work, if they could find a job.
A state that is expanding economically should also have a growing civilian labor force. Given that new unemployment claims were at their highest number since September, this was not surprising but still very unwelcomed news, especially with 110,000 fewer employed Louisianans than in January 2020.
But as jobs have slowly returned to the Louisiana economy, so too has economic growth. As the BEA recently reported, State Gross Domestic Product (GDP), or the value of all the goods and services produced in the state, increased by 33.1 percent in the third quarter (July-September) of 2020. Unfortunately, this incredibly large gain was preceded by an 11.9 percent decrease in GDP in the first quarter of 2020 and a 31.4 percent decrease in the second quarter. This means that at the end of September, GDP was lower in Louisiana than it was at the end of 2019 by $15 billion.
As we mercifully move into 2021, it’s up to policymakers to enact policy reforms to get the Louisiana economy back on track. Louisiana has been lacking in jobs and opportunity long before the pandemic, and the damage done over the last year has only made the problem worse. Policies like pro-growth tax reform, curbing lawsuit abuse, and removing needless regulatory hurdles are needed more than ever to get the Louisiana economy back on track.