Puerto Rico Economic Pulse ©

February 2012: The Recession’s Collateral Damage: Jobs

Analysis of Puerto Rico’s labor market

This is the worst recession in Puerto Rico’s history. The island economy has contracted 13% since FY 2006 or the past five years. Given this negative growth in recent years, the labor market is experiencing the consequences. What are these impacts? Is there any recovery in sight that will generate badly needed and well paid jobs in the current labor market? This issue analyzes those sectors that have lost most jobs and how trends in the labor force can give different meanings to the performance of the unemployment rate. A common misconception is that a decline in the unemployment rate is by definition is always a positive result. Find out when it is not. The recession has raised the structural rate of unemployment, reducing labor supply and potential output.The island faces many challenges ahead. Nobody said economic recovery in PR would be easy. Simply put: a shortage of jobs is bad for economic growth.