Employment ; Federal Reserve District, 8th

Christopher J. Martinek

Craig P. Aubuchon

Rubén Hernández-Murillo

Subhayu Bandyopadhyay

English

Research Papers in Economics

district overview
Employment Growth Mixed 
Across Eighth District
S
ince 2001, the composition of jobs in the 
United States and the Eighth District 
has shifted.  As employment in service-
providing industries has grown, the number 
of manufacturing jobs has decreased.  In 
October 2001, goods-producing industries 
accounted for 17.8 percent of the U.S. labor 
force.  By October 2008, this figure was 
only 15.5 percent.  Across the four largest 
Eighth District cities, this trend is also true; 
the share of goods-producing industries 
decreased from 17.1 percent to 14.8 percent 
over the same period.  The District cities 
that have performed well in service-provid-
ing industries have also experienced the 
strongest overall job growth. 
Eighth District Overview
From October 2007 to October 2008, Little 
Rock was the only large metropolitan statisti-
cal area (MSA) within the Eighth District to 
post a positive year-over-year rate of growth 
in employment.  At a growth rate of 0.03 per-
cent, Little Rock was also the only large MSA 
in the District to outperform the U.S., which 
experienced job losses of 0.8 percent.  Lou-
isville (–1.3), St. Louis (–0.9) and Memphis 
(–1.7) all posted lower year-over-year growth 
rates than the U.S. as a whole.  
St. Louis and Louisville both have a higher 
proportion of goods-producing jobs than 
the U.S. and experienced large job losses in 
the manufacturing sector.  Little Rock and 
Memphis have a higher proportion of jobs in 
the service sector than the U.S.  Strong job 
growth in the education, information and 
leisure/hospitality service sectors all helped 
lift Little Rock above the national average.  
Memphis, which had the highest share of 
service-sector jobs in the Eighth District, 
posted the lowest year-over-year growth rate, 
primarily because of job losses in the trans-
portation and trucking industry, which make 
up 27 percent of the Memphis economy. 
For the Eighth District as a whole, the  
education sector performed the best, 
although still behind the U.S. as a whole.  
Manufacturing and financial services  
experienced the largest year-over-year 
declines in job growth, with every District 
MSA reporting negative growth.
Little Rock Zone
Little Rock has posted a positive year-over-
year growth rate each year since 2003; this 
growth rate has been above the U.S. year-
over-year growth rate since 2006.  Underlying 
Little Rock’s employment growth have been 
job gains in several service industries.
From October 2007 to October 2008, Little 
Rock experienced positive job growth in 
leisure/hospitality services (3.4), information 
services (1.0), resources/mining/construc-
tion (3.0), education (1.7) and government 
(1.1).  Little Rock  was also the only branch 
city in the Eighth District to experience job 
growth in the resources/mining/construc-
tion and leisure/hospitality sectors.
As a state capital, Little Rock employs 
almost one-fifth (19.8 percent) of its labor 
force in the government sector, higher than 
the U.S. (16.4 percent) and higher than 
the rest of the Eighth District (13 percent).  
Year-over-year growth of 1.1 percent in the 
government sector helped to offset job losses 
in the manufacturing, trade/transportation 
and financial-services sectors.
Within the Little Rock Zone, the Texar- 
kana, Ark., area (2.1 percent) and Fayette-
ville-Springdale-Rogers, Ark., area (0.8 
percent) both posted positive year-over-
year growth.  Growth in Fort Smith, Ark., 
declined by 0.1.
Louisville Zone
The Louisville metro area employs 17 
percent of its work force in goods-producing 
industries, the highest proportion of the 
four branch metro areas in the District.  The 
Louisville area experienced a 1.3 percent 
decline in year-over-year growth through 
October 2008, largely due to a 6.7 percent 
drop in manufacturing.  Within that sector, 
durable goods and transportation equipment 
experienced sharp job losses.  Jobs in the 
durable-goods manufacturing sector were 
down 10 percent since October 2007; jobs in 
the transportation-equipment manufactur-
ing sector were down 29.5 percent over the 
same period. 
Louisville also experienced higher job 
losses than the U.S. as a whole in infor- 
mation services (–2.0 percent), financial 
services (–2.3 percent), business services 
(–2.3 percent) and leisure/hospitality ser-
vices (–3.5 percent).
Smaller metro areas in the Louisville 
Zone that also had a decline in employment 
The Eighth Federal Reserve District 
is composed of four zones, each of 
which is centered around one of  
the four main cities: Little Rock, 
Louisville, Memphis and St. Louis.   
MISSOURI
ILLINOIS
ARKANSAS
TENNESSEE
KENTUCKY
MISSISSIPPI
INDIANA
Memphis
Little Rock
Louisville
 St. Louis
By Craig P. Aubuchon, Subhayu Bandyopadhyay,  
Rubén Hernández-Murillo and Christopher J. Martinek
20   The Regional Economist  |  January 2009included Clarksville, Tenn. (–1.1 percent); 
Evansville, Ind. (–0.4 percent); and Bowling 
Green, Ky. (–0.4 percent).
Memphis Zone  
Memphis experienced the largest year-
over-year decline in nonfarm employment 
among branch cities, losing 1.7 percent of 
its jobs since October 2007.  Memphis lost 
jobs in nearly every employment sector, 
but a third of the losses were concentrated 
in the trade/transportation/utilities sector, 
which lost 3,600 jobs since the previous year.  
Memphis also had significant job losses in 
the construction (–5.3 percent), business 
services (–3.1 percent) and financial services 
(–3.9 percent) sectors.  Job growth remained 
unchanged for information services (0.04 
percent) and education (0.02 percent).
Jackson, Miss., a smaller MSA in the Mem-
phis Zone, experienced a zero percent change 
in year-over-year employment.
St. Louis Zone 
The St. Louis Zone mirrors the U.S. in 
its proportion of goods-producing jobs 
and service-sector jobs, with 15.6 and 84.4 
percent, respectively.  St. Louis experienced 
similar year-over-year growth rates as the 
U.S. for total employment and in several sec-
tors.  Nonfarm payroll employment declined 
by 0.9 percent from October 2007 to October 
2008, slightly below the U.S. experience.  
Job losses were similar to national losses in 
manufacturing (–4.3 percent), information 
services (–1.7 percent), financial services 
(–0.8 percent) and business services (–1.4 
percent).  St. Louis employment benefited 
from 1.4 percent  growth in education ser-
vices.  Education was the only sector in  
St. Louis to add jobs since October 2007.   
In contrast to the U.S. economy, St. Louis  
lost jobs in the government services sector.  
Within the St. Louis Zone, the smaller 
MSAs of Columbia, Mo., and Springfield, 
Mo., had  job growth of 0.1 and 0.3 percent, 
respectively.  Job growth declined by 0.2 
percent in Jefferson City, Mo.
Conclusion
Between January and October 2008, the 
U.S. shed nearly 1 percent of total nonfarm 
jobs.  Goods-producing industries such as 
manufacturing were the hardest hit.  Both 
Louisville and St. Louis, with relatively large 
proportions of their work forces involved 
in manufacturing, had significant losses.  
In contrast, regions with the strongest-
performing service industries fared the best.  
Indeed, Little Rock was the only zone that 
had positive year-over-year growth through 
October 2008. 
One apparent trend is that declining eco-
nomic activity has reversed previous gains in 
service-sector employment that once covered 
job losses in the manufacturing sector.  For 
instance, the large share of transporta-
tion jobs in Memphis has reduced overall 
employment in the local economy because 
there are fewer goods to move.  Employment 
in financial services has declined in all four 
branch cities of the Eighth District.  Exclud-
ing Little Rock, the professional and business, 
and leisure/hospitality services sectors have 
gotten smaller in each branch city. 
Subhayu Bandyopadhyay and Rubén Hernán-
dez-Murillo are economists at the Federal 
Reserve Bank of St. Louis.  For more on their 
work, see http://research.stlouisfed.org/econ/
bandyopadhyay/index.html and http://research.
stlouisfed.org/econ/hernandez/index.html.  
Craig P. Aubuchon and Christopher J. Martinek 
are research associates at the Bank.
       
4.0
3.0
2.0
1.0
0.0
–1.0
–2.0
–3.0
–4.0
–5.0
–6.0
–7.0
 
    Resources,    Trade,      Professional       
  Total  Mining and    Transportation  Information  Financial  and Business  Education  Leisure and    Other
  Nonfarm  Construction  Manufacturing  and Utilities  Services  Services  Services  and Health  Hospitality  Government  Services
      
Little Rock  0.03  3.02  –3.64  –2.40  1.05  –2.95  –0.36  1.70  3.39  1.14  1.42
Louisville  –1.27  –3.35  –6.74  0.18  –1.97  –2.30  –2.29  1.46  –3.47  2.65  –0.72
Memphis  –1.65  –5.25  –1.50  –2.03  0.04  –3.87  –3.14  0.02  –2.05  –0.25  2.90
St. Louis  –0.86  –0.60  –4.25  –0.37  –1.67  –0.81  –1.43  1.38  –0.76  –1.17  –0.48
U.S.  –0.78  –5.20  –3.75  –1.63  –1.52  –1.53  –1.66  2.77  –0.01  1.05  0.60 
Employment Growth
OCTOBER 2007 TO OCTOBER 2008—PERCENT CHANGE
The Regional Economist  |  www.stlouisfed.org   21

Employment growth mixed across Eighth District

http://stlouisfed.org/publications/re/2009/a/pdf/dist_ovrvw.pdf

Employment growth mixed across Eighth District

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