Puerto Rico employment declined 3% over four months
The number of people employed in Puerto Rico declined 3% between August and December, according to the U.S. Bureau of Labor Statistics.
According the bureau’s household survey on employment, employment in August was 1,003,320 and employment in December was 973,556.
From August to December the unemployment rate on the island increased to 8.4% from 7.7%.
The bureau also compiles a “payroll survey” of employers called Current Employment Statistics. Unlike the household survey, it doesn’t measure self-employment or farm employment.
The payroll survey showed that total employment was down 0.4% in December compared to August. It also showed that private sector employment declined 0.5% in the same period.
“Payroll employment data shows no change from December 2018 to December 2019," said Advantage Business Consulting President Vicente Feliciano. The BLS [household survey] labor force data tends to be volatile and inaccurate, he said; The BLS payroll [survey] employment data is much more reliable.
“I sense that the no change is closer to the actual market behavior,” Feliciano said. Advantage Business Consulting is a Puerto Rico-based business and economic consultant.
"We usually don't follow household surveys for total employment," Inteligencia Económica Economist Chantal Benet said. "We usually measure nonfarm payroll which provides a clearer snapshot of current employment tendencies. In nonfarm payroll, employment decreased from 874,300 in August to 871,300 in December. We have no clear reason why the drop in overall employment but we did find that the majority of jobs lost were in professional services."
Still, the December household employment figure was the lowest since January 2018 and the payroll employment figure was the lowest since November 2018.
Over the last five years, employment changes have been modest. Total employment as found in the household survey was down 0.92% to December from December 2014. Total private sector employment as found in the payroll survey was down 1% in the same period.
All employment statistics in this story have been seasonally adjusted.
The most recent available economic activity index report for Puerto Rico, for November, showed the index was up 0.1% on a month-to-month and 0.3% on a year-over-year basis. The index figure has gone down four out of the last six months on a year-over-year basis.
Puerto Rico is 3 and a half years into a municipal bond bankruptcy process potentially affecting more than $70 billion in bonds. Municipal Markets Analytics Partner Matt Fabian has said that payment on any restructured bonds will require the island avoiding a prolonged economic downturn in the future. The island’s economy has generally been declining since 2006.
The island’s economic activity index is down about 29% from its peak in 2006.
In early and mid-January, a series of earthquakes hit Puerto Rico’s southwest. The initial earthquake triggered electrical outages across the island for several days. In January Estudios Técnicos Chairman José Villamil said that the earthquakes would have a small immediate negative effect, due to infrastructure damage. A bigger problem for the economy was that people now know that earthquakes are an additional risk factor for the island.