Wyoming Labor Force Trends

June 2023 | Volume 60, No. 6

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Expansion and Contraction of the Wyoming and U.S. Economies, 1990-2022:
A Study in Contrasts

Article | Figures

by: David Bullard, Senior Economist

Wyoming's economy often moves in a different direction from the national economy. This article looks at employment in Wyoming and the U.S. at different points over the last 30 years to illustrate some of those differences.

Wyoming’s economy has been through many ups and downs. This article focuses on employment dynamics from 1990 to 2022 and compares Wyoming to the U.S. in two important measures: total nonfarm employment and the unemployment rate. Because Wyoming’s economy is more dependent on the mining sector (including oil & gas), it is highly influenced by energy prices. When energy prices rise, Wyoming’s economy tends to add jobs, but when energy prices decline, exploration and extraction activity slow and employment often falls. On the other hand, changing energy prices have a much smaller effect on the U.S. economy.

Figure 1 shows total nonfarm employment for Wyoming and the United States from 1990 to 2022. Over that span of 33 years, Wyoming added 92,700 jobs (47.4%) and the U.S. added 45.4 million jobs (41.6%). Although the overall trend both in Wyoming and the U.S. was an upward pattern of job growth, there were a few times when U.S. job growth and Wyoming job growth diverged.

Figure 2 focuses on a shorter time frame in order to provide a close-up view of employment from 2000 to 2004. This period includes the U.S. recession, which ran from March 2001 to November 2001 (NBER, 2021). U.S. employment peaked at 132.8 million jobs in February 2001, and then declined by 2.6 million jobs (-2.0%), reaching a trough in August 2003. Wyoming employment continued to grow during this period, adding 8,000 jobs (3.3%). One of the primary drivers of the U.S. recession was the manufacturing sector, which lost 2.7 million jobs (-15.6%). The next largest job losses were in professional & business services, which fell by 821,000 jobs (-4.9%).

From 2003 to 2008, Wyoming added jobs at a much faster pace than the U.S. (see Figure 1). That was because mining employment grew rapidly in Wyoming. The Baker Hughes rig count for Wyoming more than tripled from 33 in January 2003 to 109 in September 2006. This was also a period of in-migration as workers moved to Wyoming from other states. Rapid job growth caused Wyoming’s unemployment rate to fall to a low point of 2.6% in eight different months in 2007 and 2008 (See Figure 3).

Figure 4 shows employment from 2014 to 2018. During these years, U.S. employment grew very steadily, but Wyoming lost 18,300 jobs (-6.1%) from January 2015 to December 2016. The job losses in Wyoming were primarily in the mining sector (including oil & gas; -8,800 jobs, or -32.6%). As oil prices collapsed, Wyoming’s rig count fell from 61 in November 2014 to seven in May 2016. Additionally, major layoffs were announced at several Wyoming coal mines (Johnson, 2016). In contrast, the U.S. added 4.8 million jobs (3.4%) from January 2015 to December 2016. Wyoming’s unemployment rate rose from 3.9% in February 2015 to 5.7% in April 2016 (see Figure 3). Each month from January 2016 to January 2017, Wyoming had a higher unemployment rate than the U.S.

The pandemic period is illustrated in Figure 5. From January 2020 to April 2020, the U.S. lost 21.7 million jobs (-16.6%). Wyoming employment fell by a smaller amount (27,500 jobs, or -10.4%). Despite having smaller job losses, Wyoming’s economy has been slower to recover. U.S. nonfarm employment exceeded its January 2020 level in June 2022, but in December 2022, Wyoming’s total nonfarm employment was still slightly lower (-2,500 jobs, or -0.9%) than its January 2020 level. It is not clear why the recovery in Wyoming has been less robust than the U.S. The U.S. unemployment rate skyrocketed from 3.5% in February 2020 to 14.7% in April 2020 (see Figure 3). Wyoming’s unemployment rate also rose, but peaked at 8.7% in May 2020.

In summary, it is not unusual for Wyoming’s economy to move in a different direction from the U.S. economy. Sometimes, that divergence is related to large changes in energy prices. In 2001, when the U.S. was in a recession, Wyoming continued to add jobs. From 2003 to 2008, the state’s energy sector expanded rapidly and Wyoming employment rose much faster than the U.S. Later, in 2015 and 2016, declining energy prices caused Wyoming employment to fall, while the U.S. steadily grew. Wyoming is now adding jobs and recovering from pandemic job losses. With the Federal Reserve raising interest rates in an effort to deal with inflation, there is a larger-than-normal amount of uncertainty regarding the near-term direction of the U.S. economy.

References

Johnson, G. (2016, March) 465 PRB coal miners laid off. Gillette News Record. Retrieved March 6, 2023, from https://tinyurl.com/56cumuwk

National Bureau of Economic Research. (2021). U.S. Business Cycle Expansions and Contractions. Retrieved March 6, 2023, from https://tinyurl.com/5n8mntk8