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Local unemployment up in November

Holding to a trend that has remained steady for the last 34 years, November unemployment climbed in Archuleta County, this year to 10.5 percent, up from 9.1 percent in October, according to a report released late last week by the Colorado Department of Labor and Employment.

Traditionally, local unemployment increases during the last two months of the year and continues to trend upwards through the first quarter of the following year.

While November’s increase of 1.4 percent from the previous month is not unprecedented — prior to 1990, November unemployment numbers saw an average 2.1 percent increase from October — it is the most dramatic increase since 1989 (from 4.5 percent in October to 10.8 percent in November). Since 1990, the county has had a .7 percent average increase in unemployment from October to November; this year’s increase is double that average.

Worse, 2010 is on track to be the county’s worst year for unemployment since 1986 (with a year’s average unemployment of 10.3 percent); if December’s unemployment numbers match November, 2010 will finish with a 9.6 percent year’s average.

That unemployment situation is reflected in the increased need for social assistance benefits in the county. According to Erlinda Gonzalez, director of Human Services for Archuleta County, benefits for Supplemental Nutrition Assistance Program (which used to be called food stamps) served 427 households in November of this year, up from 324 households the same time last year — an increase of 24.1 percent.

Likewise, Gonzalez reported that households receiving Low-income Energy Assistance Program (LEAP) benefits had increased 24 percent this year — 211 households so far this year compared with 161 households the same time last year. Due to state budgetary constraints, LEAP benefits have been reduced by 45 percent this year, placing additional financial strain on families and individuals relying on those benefits to help them get through the cold winter months.

Unfortunately, November’s 10.5 percent could represent just the tip of the iceberg: that number, the so-called official U3 number, represents first-time unemployment claims added in with ongoing claims for unemployment insurance.

Neither the CDLE nor the Bureau of Labor Statistics (BLS) reports the U6 unemployment rate at the county level — an alternative measure which counts part-time workers desiring full-time work, along with numbers of unemployed workers too discouraged to have looked for jobs. As such, November’s U3 number of 10.5 percent unemployment may only represent a portion of actual unemployed (or marginally employed) workers in the county — a number that could quite possibly exceed 25 percent in the county.

A 25 percent estimate for the county’s U6 comes from the fact that many local workers (over 15 percent of the workforce for Archuleta County in 2007) were engaged in construction trades — most of those self-employed subcontractors and ineligible for unemployment benefits. As such, they would not be listed in either local U3 statistics or even U6 numbers (if those were calculated).

On the national level, unemployment rose again from 9.6 percent in October to 9.8 percent in November; the U6 number held steady at 17 percent (and down .1 percent from September).

Fortunately, the U.S. Commerce Department reported on Tuesday that retail sales climbed 4.2 percent this past week compared to the same time last year, far exceeding projections by many analysts who had initially forecast flat sales for the holiday season.

Consumer spending accounts for 70 percent of the U.S. economy, with the holiday season accounting for about 30 percent of annual retail sales. While it remains to be seen how increased consumer spending will benefit the U.S. economy in the months to come (and if that spending will translate into more jobs), most economists agree that a jump in retail sales numbers reflect renewed consumer confidence, which reached its highest point in five months during the month of November.

In Archuleta County, sales tax revenues have shown a leveling off during the past six months after almost two years of sustained declines. Sales tax revenues for November will be released in mid-January.

While unemployment is not a leading economic indicator, many local residents dealing with unemployment are no doubt less concerned with better sales tax collections than continued high unemployment numbers. The January report for December’s unemployment figures could indicate if a better sales climate in Archuleta County has done anything to improve a local unemployment situation that, for all intents and purposes, is the worst in over two decades.