The economic recovery in New Mexico from the COVID-19 pandemic recession appears to continue in the job market.
A report released Friday showed that New Mexico added 20,900 nonagricultural payroll jobs, a 2.5 percent rise, between May 2022 and May 2023
“The majority of gains came from the private sector, which was up 16,200 jobs, or 2.4 percent. The public sector was up 4,700 jobs, or 2.6 percent,” according to the state Department of Workforce Solutions.
According to the governor’s office, this is the largest economic growth the state has seen in its history which presumably begins in 1912 when New Mexico became a state.
The unemployment rate remained at 3.5 percent which is lower than May 2022 and down from its 10 percent peak in June 2020 when more than 92,000 New Mexicans filed for unemployment benefits.
“The robust job growth in New Mexico is proof positive that we are enacting all the right policies to grow our economy,” Gov. Michelle Lujan Grisham said in a news release. “We are paying people a livable wage, providing child care for working parents, and making it easier for employers to find prepared candidates by putting more people through college and technical training.”
Among the jobs added included 5,322 jobs in transportation and warehousing; professional, scientific and technical services added 7,194 jobs; construction added 3,022 jobs; manufacturing added 1,541 jobs and healthcare and social assistance industries added 2,269 jobs.
The jobs increase has been attributed in part to President Joe Biden’s Investing in America agenda which seeks to lower inflation by investing in private businesses, rebuilding infrastructure including transportation projects and water access, supporting small businesses, creating clean energy jobs and lowering costs.
Although Investing in America was a contributing factor in the raised economy, it is not the only factor.
“All of this should be viewed in the context of post-pandemic recovery,” UNM Associate Professor of Finance Reilly White told NM Political Report Wednesday. “We have an outstandingly strong job market for New Mexico. Our unemployment rate is 3.5 percent, you know, our total nonfarm workforce… has been at the highest level that we’ve seen.”
White specified that the nonfarm/nonagricultural workforce is “a nice way of saying it’s just part of the civilian labor force that isn’t involved in both farming or nonprofits or active military or stuff like that,” he said.
The New Mexican economy is different from that of most other states due to the makeup of the workforce itself, White said.
This is due to the large number of federal employees working at the national labs as well as those on military bases or for other federal agencies.
“One of the things about New Mexico, if we go back three or four decades, is that we are slower to fire and we’re slower to hire after recessions,” White said. “So even in a recession, like the pandemic recession, we actually followed a pathway that was very similar, although accelerated to the pathway we took following the Great Recession into 2008, and then going back to the tech recession of 2001.”
The situation now is that the recovery is reversed since New Mexico tends to take a long time to recover from a recession.
“Back a year ago, our unemployment rate was 5.1 percent and we were the 50th in the country for unemployment. Now we rank among states about 35th,” White said. “We still have a slightly better unemployment rate than states overall and some of that is due to the nature of our job market itself.”
New Mexico has a smaller number of large companies which tend to recover more quickly than governmental organizations due the way they hire and fire employees, White said.
This means that post-recession recovery in New Mexico tends to be much slower than in other parts of the country.
One part of the recovery is large amounts of money used for economic stimulus programs such as the Investing in America agenda as well as the cyclical nature of New Mexico’s economy, White said.
White estimates that about $5 trillion were spent on pandemic recession economic stimulus packages.
White said the unemployment rate falling to 3.5 percent is good.
“New Mexico, in many ways, is following the pathway of much of the country with regards to our recovery, following the pandemic, but there are some uncertainties out there,” White said.
One of these factors is labor force participation is the third lowest in the country, White said.
This is due to several factors including childcare costs, economic opportunity availability and demographics such as more members of the older generations moving into the state than younger people or those who are already in New Mexico retiring.
“This complicates the question of how we can be more competitive in the long run,” White said. “So one of the questions that we have to address as a state is, you know, ways we can diversify the economy to create a wider swath of opportunities to help boost things like our labor force participation, and also attract jobs and opportunities from other states.”
The Investing in America agenda included the Infrastructure Investment and Jobs Act which has so far awarded New Mexico with $2.6 billion for work on 217 infrastructure projects including roads, bridges, clean water, broadband expansion, airports and public transportation.