Archive for Thursday, October 22, 2009

State economy seen as weak despite dip in jobless rate

October 22, 2009


— Kansas officials remained pessimistic Wednesday about the economy, even though the state Department of Labor reported that unemployment dropped in September.

The department’s economists highlighted another statistic in their monthly report, the loss of 59,700 nonfarm jobs in September, compared with September 2008. The decline was 4.3 percent, the worst so far this year.

The unemployment rate in September was 6.9 percent, down from a revised rate of 7.2 percent for August. But the jobless figure was only 4.7 percent in September 2008.

Also, the only significant growth in nonfarm jobs from August to September was for government, where school districts appeared to be bringing non-teaching staff back on board for the new academic year.

“I think we’re going to see an increasing trend in unemployment,” said Tyler Tenbrink, a Department of Labor economist.

Kansas’ unemployment rate also declined in August compared to July, and August saw the labor force, total employment and the number of people actively seeking work all decline.

In September, the total work force expanded slightly to almost 1.53 million people, and total employment increased by almost 9,000 jobs.

But Tenbrink said it’s typical for total employment to increase by about 20,000 jobs from August to September.

Art Hall, executive director of the Center for Applied Economics at the University of Kansas, also noted some Kansans are no longer counted as being in the labor force and actively seeking work.

Federal officials raised that issue last month in noting declines in unemployment in August in several states, including Kansas. Anyone who’s not looked for work within the previous four weeks is not included in the labor force, state officials said.

“That is, to me, the more probable source for the drop than anything else,” Hall said of September’s lower rate. “You’re no longer unemployed and looking for work. You’re just chronically unemployed.”

Tenbrink said employment statistics from July 2008 through June 2009 suggest that if people who aren’t looking for work are included in the state’s labor force, its monthly unemployment rates would be 0.9 percentage points higher.

But he was skeptical that people not looking for work was a big factor in September’s drop, because of the slight expansion of the labor force. Still, Tenbrink acknowledged Kansas’ labor market remains weak.

Starting in January, the state saw lower nonfarm employment than in the same month the year before.

The pace of those losses picked up during the winter and spring and had appeared to peak in June, when the state had 53,100 fewer nonfarm jobs than in June 2008, a decline of 3.8 percent.

The state had 14 percent fewer manufacturing jobs in September than in September 2008, a decline of 26,400, the Department of Labor reported. Construction jobs fell off 12 percent, declining by 8,100.

“Overall, the effects of the recession are still being felt in a significant way across the state,” Tenbrink said.


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