Louisiana Economic Situation March 2024: Employment Declines by 16,000 Since March 2023

Originally published at Pelican Institute.

I​t’s Geaux Time in Louisiana. The potential changes in Baton Rouge to remove barriers to work and let people keep more of their hard-earned money provide a more optimistic path for the Pelican State. This is much needed given the declining population over time and declines in employment for eight straight months.

Let’s consider the latest data to see what’s really going on.

The U.S. Bureau of Labor Statistics recently released Louisiana’s labor market data for February. These data provide details to evaluate how people are doing across the state.

Louisiana’s unemployment rate increased to 4.2% per the household survey.

• The labor force declined by 48 people to 2,079,296, and the number of people unemployed increased by 2,903 to 88,026. This contributed to the increase in the unemployment rate from 4.1% to 4.2%, the state’s highest rate since November 2021.
• If the working-age population hadn’t declined by 179 people to 3,542,292 but were in the labor force and unemployed, the unemployment rate would be much higher than the reported rate.
• The labor force participation rate remained at 58.7%, and the employment-population ratio fell slightly to 56.2%.
• Fewer people working means less opportunity for lower poverty and more economic growth.

Employment has declined by 16,034 since March 2023, with employment declining in eight of the last eleven months.

• The establishment survey shows that nonfarm employment has been flat at 1.95 million people since March 2023. Louisiana is one of eight states with fewer people employed than in February 2020 before the COVID-related lockdowns, with 35,900 fewer people employed since then. The household survey shows that employment is down by 16,034 jobs since March 2023 because of job losses in eight of the last eleven months.
• In February, nonfarm employment fell by 200 jobs (the fifth-largest percentage decrease of any state, with only seven states experiencing job losses that month). However, the household survey showed employment declined by 2,951 jobs in February.
• Jobs are tough to find and becoming more difficult to find across the state.

Louisiana workers’ purchasing power continues to decline across most industries.

• Even with the recent nonfarm job losses, they have increased by 3,100 jobs over the last year for a 0.2% increase (the third slowest). Private sector jobs are up 0.1%, and government jobs are up 0.4%.
• In February, private-sector employment increased by 1,600 to 1.64 million, while government employment declined by 1,800 to 316,300. This brings the government-private employment share to 19.3%, near the lowest on record OF 19.1% in July 2022.
• Growing weakness in the labor market hurts families, including average weekly earnings not rising as fast as chained CPI inflation of 2.9% in many industries (Figure 1).

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Figure 1. Louisiana’s Labor Market by Industry

​Economic growth has slowed, and GDP and personal income growth are below the U.S. average.

• The Bureau of Economic Analysis (BEA) recently reported that annualized growth in real GDP in Louisiana was +3.0% in Q4:2023 (below the 3.4% U.S. average), ranking 32nd in the country to $241.9 billion. Figure 3 illustrates what BEA reported for real GDP of 3.0% for 2023, ranking 16th in the country.
• Personal income grew by 3.2% in the fourth quarter of 2023, ranking it 42nd in the country at $264.1 billion. It grew 4.4% in 2023, ranking it 40th in the country.

Figure 3: Real Gross State Product by State in 2023

​Bottom Line: Louisiana’s economy is mostly weak with some green shoots for growth. These past results are based on the state’s complicated tax system, high regulations, and excessive government spending that have resulted in a poor business tax climate, net out-migration, and one of the highest poverty rates in the country. But with changes in Baton Rouge this year, there is an opportunity for bold, pro-growth reforms.

​These bold reforms include:

• Following the Pelican Institute’s “Comeback Agenda” that encourages spending restraint now to contribute to major tax reform next year, regulatory relief, education freedom, a revamp of workforce and social safety net programs, and more.
• It’s Geaux Time!