AUGUSTA – The employment situation in Maine continued to gradually improve in July from the effects of the pandemic:

Payroll jobs increased by 1,200

Labor force participation increased

The unemployment rate was little changed at 4.9 percent

Seasonally Adjusted Estimates

Nonfarm Payroll Jobs Estimates – The number of nonfarm payroll jobs increased by 1,200 to 617,500 in July and the estimate for June was upwardly revised by 1,400. Over the two-month period the state gained 5,600 jobs. Most of the July gain was in the public education and professional and business services sectors. Those and smaller gains in other sectors were partly offset by a decrease leisure and hospitality jobs, which partially reversed a large gain in June.

(The pandemic has disrupted normal seasonal buildup and layoff patterns in some sectors. Job gains in the leisure and hospitality sector were larger than usual in June and somewhat less than usual in July, causing a decrease in jobs in the sector in July after seasonal adjustment. In public education the number of jobs was lower than usual preceding the end of the school year, so the smaller than usual seasonal decrease in July was an increase after seasonal adjustment.)

The number of payroll jobs increased 40,800 from a year-ago. The largest over the year gains were in the leisure and hospitality, manufacturing, retail trade, professional and business services, and public and private education sectors.

In July there remained 22,500 fewer jobs than in February 2020, before the virus impacted the labor market. The 3.5 percent net decrease during that period is close to the 3.7 percent U.S. decrease. Jobs remained down the most in leisure and hospitality, public and private education (K-12 and higher ed), and healthcare and social assistance than in the month before the pandemic began to impact the state.

There were more jobs in the professional and business services and wholesale trade sectors in July than before the pandemic, and several other sectors were close to pre-pandemic levels.

Labor Force and Unemployment Estimates – The number of unemployed increased 700 in July to 33,200 and the unemployment rate edged up to 4.9 percent. The small increase in unemployment occurred because labor force participation increased slightly more than employment did. The labor force participation rate increased 0.3 percentage points to 60.4 percent to the highest rate in 12 months; the employment to population ratio increased 0.2 points to 57.4 percent to the highest rate in 16 months.

Compared to February 2020, the unemployment rate in July was 1.8 percentage points higher, the labor force participation rate was 2.2 points lower, and the employment to population ratio was 3.3 points lower.

The decrease in employment since February 2020 is partially reflected in the 11,500 increase in the number of unemployed. The remainder of the decrease in employment is reflected in lower labor force participation. If participation was as high in July as 17 months earlier, the unemployment rate would be 8.3 percent. (Unemployed are jobless people who were available and seeking work. Jobless people who were not available for work due to health, childcare, or other reasons, or who did not seek work are not considered to be in the labor force and are not counted as unemployed.)

U.S and New England Unemployment Rates –The U.S. and New England unemployment rates were 5.4 percent and 5.2 percent in July. Rates for other states in the region were 2.9 percent in New Hampshire, 3.0 percent in Vermont, 4.9 percent in Massachusetts, 5.8 percent in Rhode Island, and 7.3 percent in Connecticut.

Substate Not Seasonally Adjusted Estimates

The not seasonally adjusted statewide unemployment rate of 5.0 percent for July was down from 8.4 percent one year ago. Unemployment rates were lowest in Knox, Lincoln, and Sagadahoc counties (4.3 percent) and highest in Somerset County (7.3 percent).

Unemployment rates were below the statewide average in the Portland-South Portland metro area (4.5 percent), at the average in the Bangor metro (5.0 percent), and above the average in the Lewiston-Auburn metro (5.7 percent).

August workforce estimates will be released Friday, September 17 at 10 a.m. (Data Release Schedule).

Labor force and unemployment data is available here.

Nonfarm payroll jobs data is available here.

Monthly workforce estimates are cooperatively produced and released by the Maine Department of Labor, Center for Workforce Research and Information and the U.S. Department of Labor, Bureau of Labor Statistics.

NOTES

Preliminary seasonally-adjusted labor force estimates, including rates (labor force participation, employment, and unemployment rates), and levels (labor force, employed, and unemployed) tend to move in a direction for several months and then reverse course. Those directional trends are largely driven by a smoothing procedure and may not indicate a change in underlying workforce conditions. Annual revisions (published in March each year) tend to moderate or eliminate those directional patterns. A comparison of 2020 preliminary and revised estimates of labor force and unemployment rates, as well as nonfarm payroll jobs, is available at maine.gov/labor/cwri/blogs/ 2021_workforce_data_revisions.pdf

The 90 percent confidence interval for statewide unemployment rates for July is 0.9 percentage points above or below the published estimate.

To assess job growth, we recommend looking at nonfarm jobs from the payroll survey rather than at resident employment from the household survey. The payroll survey is larger, has smaller margins of error, and is subject to smaller revisions. A 2016 blog on the differences in accuracy of the two measures provides more context at maine.gov/labor/cwri/blogs/ imprecise_data.pdf

Nonfarm payroll jobs estimates tend to be volatile from month to month because there is variability in the sample of reporting employers and their representativeness for the universe of all employers. Additionally, seasonal adjustment is imperfect because weather, the beginning and ending of school semesters, holidays, and other events do not always occur with the same timing relative to the pay period that includes the 12th day of the month, which is the survey reference period. This sometimes exacerbates monthly volatility. Users should look to the trend over multiple months rather than the change from one specific month to another. Estimates for the period from April 2020 to September 2021 will be replaced with actual payroll data in March 2022. Those benchmark revisions are likely to show less volatility than preliminary estimates do.