After staying stagnant for several months, New Mexico’s unemployment rate dropped in August but remained well above the national average.
New Mexico posted a seasonally adjusted unemployment rate of 7.2% last month, down from 7.6% in July, according to data from the U.S. Bureau of Labor Statistics. New Mexico’s unemployment rate was tied for the fourth-highest in the nation in August, behind California, Nevada and New York, according to the BLS.
The monthly rate is the state’s lowest since last March – when the pandemic reached New Mexico – but is still higher than the national rate, which stood at 5.2% in August.
Michael O’Donnell, acting director of the University of New Mexico’s Bureau of Business and Economic Research, said single-month unemployment numbers, which are based on a survey of households, can be unreliable and prone to revision. However, O’Donnell added that the overall trend is encouraging for New Mexico after several months of limited movement.
“I think that the number, given how much it fell, indicates some improvement in the labor market,” he said.
Late summer brought a number of changes for New Mexico’s labor market. The state lifted its remaining capacity restrictions on businesses in early July, and announced a back-to-work support payment of up to $1,000 for New Mexicans who returned to work between July 4 and Aug. 28, after businesses reported hiring struggles.
The loss of expanded unemployment programs, which expired at the beginning of September, may have impacted the unemployment rate as well.
Some New Mexicans may have taken jobs knowing the benefits would expire. However, O’Donnell noted that New Mexico’s overall labor force dropped slightly in August, which he said could indicate that the loss of benefits requiring a weekly job search, alongside existing concerns like finding childcare, inspired some unemployed New Mexicans to stop looking for work last month.
Overall, New Mexico added 10,800 jobs from July to August, and 32,800 jobs since last August, according to data from the New Mexico Department of Workforce Solutions. The state’s leisure and hospitality sector, which was hit particularly hard early in the pandemic, has added 20,500 jobs since last August, according to DWS.
Given that New Mexico had been trailing other states in residents returning to work, O’Donnell said the state had more room to improve relative to some of its neighbors. While he said New Mexico’s continued improvement depends on its ability to contain the virus, he added that the drop in the state’s unemployment rate represents a cause for optimism.
“The way that employment has been moving or not moving, I think any kind of positive trend in those … variables is a good sign,” O’Donnell said.
