PEORIA — Economic indicators for the Peoria area showed stability in the first quarter of 2016, with job losses in some sectors offset by gains in others and a mixed forecast for short-term growth.
The Center for Business and Economic Research at Bradley University’s Foster College of Business found a less than 1 percent decline in the number of people working in the Peoria-Pekin Metropolitan Statistical Area from the fourth quarter of 2015 to the first quarter of this year.
And that working population of 174,637 people still represented a 1.1 percent increase from the same time last year.
“We had stability in the first quarter, which, given things going on, was not necessarily an assumption anyone could make,” said Bernard Goitein, professor of management and director of the research center. “It’s nice to see stability.”
Accompanying the slight decline in the number of people working was a sharp cut in new unemployment claims, which fell 21.5 percent in the first quarter of 2016 from the fourth quarter of last year. The local unemployment rate, however, went up 1.2 percentage points from quarter to quarter — to 8.1 percent — a figure 1.3 percentage points higher than the same time last year.
“It looks like the employee decline is basically employee initiated,” Goitein said, rather than employer-initiated layoffs. Retirement and the acceptance of severance packages would fall under the category of “employee-initiated” job losses.
Employment sectors that lost jobs in the first quarter included hospitality and entertainment (down 1.5 percent quarter to quarter but up 3 percent from a year ago) and construction (down 3.1 percent quarter to quarter but back to the same level as a year ago).
Sectors showing gains included services and trade (health care jobs were up 1.1 percent), retail and wholesale jobs (up 0.5 percent) and manufacturing (up 0.6 percent in the quarter but still 9 percent below year-ago levels).
Manufacturing jobs in particular reflect the big picture of the economy, Goitein said.
“These industries are most sensitive to the broader business climate,” he said.
Growth indicators such as the new job opening index (down 3.1 percent from a year ago) and the number of new single-family building permits (up 8.3 percent quarter to quarter but down 6.3 percent from last year) do not forecast significant economic change in the near future.
“Leading indicators were mixed, so that does not signal much change in the short term,” Goitein said.
But one other major national labor issue could portend some positive economic change. The extent of any growth from the announcement this week extending overtime pay to more Americans, however, won’t be known until the new rules take effect in 2017.
“The Department of Labor says this will affect about 1.2 million people, so this will not effect most of us in a significant way,” Goitein said.
The new overtime pay rule, however, could result in the creation of up to 120,000 new jobs in the first year, Goitein said, summarizing a Goldman Sachs estimate.
“It will be interesting to see how that plays out locally,” he said.
Matt Buedel is the Journal Star business reporter. He can be reached at 686-3154 and firstname.lastname@example.org. Follow him on Twitter @JournoBuedel.