Puerto Rico's employment situation continued improvement in March.
The United States Bureau of Labor Statistics reported that the unemployment rate declined to 14.7% in March from 15% in February. March was the third consecutive month that the rate had declined, with the preceding months' rates being 15.5% in December and 15.2% for January.
Puerto Rico's economy has generally been in decline for nine years and analysts say that Puerto Rico must resume economic growth if it is to be able to pay back its total public sector debt of $70 billion. The bureau's employment figures are partial measurements of the island's economy.
The unemployment rate is based on the bureau's household employment survey. Because Puerto Rico has a relatively large portion of its workforce working in the "underground economy" where taxes are not paid, this survey is not that reliable, said Vicente Feliciano, president of Advantage Business Consulting, one of the island's economic consulting firms. When asked by government surveyors if they hold jobs, those who are holding informal jobs and collecting unemployment insurance may lie and say that they are unemployed, Feliciano said.
To determine movements in the island's economy, Feliciano said it was better to focus on the establishment employment survey. This surveys businesses about their employment.
It is generally believed that employment trends in the informal sector mirror those in the formal sector. The establishment survey surveys only the formal sector.
The establishment survey shows that employment was up 0.18% in March compared to February. Employment had been down slightly in February compared to January but employment in March was up 0.11% from January.
The household survey showed that total employment was down 0.28% in March from February. However, Joaquín Villamil, of the Puerto Rico economic consulting firm Estudios Téchnicos said the details of the figures painted a different picture of the economy.
For the last two to three months private sector employment has increased in this survey, Villamil said. Greater declines in the government sector have caused the total employment figures to go down. The declines in government jobs has generally been because of retirements, Villamil said. "That's good news, in some ways." The island would benefit from a smaller government, he said.
The employment report overall painted a picture of an improving Puerto Rican economy, Villamil said.
Over the past year Feliciano said the economy had lost 4,600 jobs, according to the establishment survey. However, in the same period the government sector lost 10,000 jobs. This means the private sector has added 5,400 jobs in the period, an encouraging sign, he said.
