Area unemployment improved for the sixth straight month, dropping from 8.1 percent in September to 8 percent in October.
For all intents and purposes, October’s report from the Colorado Department of Labor and Employment indicates that the local job situation has seen the worst (hitting 24-year highs late last year and earlier this year) and is beginning to rebound.
Local unemployment numbers reflect the trend at the state level. In October, statewide unemployment fell to 8.1 percent, the fourth straight month of improvement, also down from historical highs exhibited during the final quarter of 2010 and the first two quarters of this year.
Likewise, the national unemployment rate dropped to 9 percent in October, the Bureau of Labor Statistics reported last week. Colorado was one of 36 states that saw its unemployment rate fall; five states saw an increase in unemployment and nine states saw no change in their rate.
The improvement nationally followed the fourth straight week of declines in unemployment claims, hitting a seven-month low last week.
Indications suggest that the economy and employment may be picking up in the final quarter of this year. Although the Commerce Department reported last week that the economy expanded at just a 2-percent annual rate in the third quarter, below an earlier estimate of 2.5 percent, many analysts believe the drop was due to companies decreasing stockpiles of goods on the heels of an expectation for slowing consumer and business demand.
In fact, the national economy got a boost earlier this week when both online and bricks-and-mortar retailers reported brisk sales over the four-day period that starts on Thanksgiving. On Monday, the National Retail Foundation reported that traditional retail stores pulled in $52.4 billion in sales, up 16.7 percent from last year, with $11.4 billion in sales reported for Black Friday alone.
Likewise, e-commerce spending jumped 26 percent on Black Friday, with $816 million in online sales for the day, up from $648 million last year.
On Tuesday, IBM reported record sales for Cyber Monday, driven largely by sales of smart phones and tablets. That report showed a 33-percent jump in U.S. sales from last year, with consumers spending about 2.6 percent more this year — the value of an average online order rose from $193.24 in 2010 to a record $198.26 this year.
On the heels of that positive news regarding consumer spending, analysts revised economic forecasts upwards, predicting a little over 3-percent growth in the final quarter of 2011.
Local results for post-Thanksgiving retail sales will not be reported until early February. However (as reported Nov. 17 edition of The SUN), this year is on track for showing an improved economy from 2010. As of September, year-to-date sales tax collections are up 1.5 percent from September year-to-date collections last year, with that month’s collections up 6.8 percent relative to September 2010.
Those numbers reflect the subtraction of collections in the “Transportation and Warehousing” sector; adding collections from a Colorado Department of Revenue audit, year-to-date collections in September were up 6.45 percent from 2010, with the month showing a 14.43 percent increase from the same month last year.
Still, since the end of the first quarter in 2011, local unemployment has shown steady improvement and, while employment numbers are not considered a leading economic indicator, those numbers certainly reflect the relative health of an economy.
Furthermore, October’s unemployment numbers suggest an improvement in the local economy, on a number of levels.
First of all, the Civilian Labor Force (CLF — the total number of residents available for work) number rose in October, adding 262 workers to the local work force since September, a 4.4-percent increase.
Sometimes, improved unemployment numbers can be attributed to a decrease in the CLF; that was not the case in October.
In fact, October’s CLF increased 6.2 percent from the same month last year, when unemployment was a full percent higher than in October 2011.
Furthermore, in comparison with last year, unemployment figures have been lower during the past four months than during the same period last year, averaging 8.5 percent over those months, compared to 9.05 percent during the same period in 2010.
Although average unemployment for 2011 is trending to outpace the 2010 average (10.3 percent this year compared to 10.2 percent), this year’s numbers were skewed due to dismal numbers recorded during the first four months of 2011 (averaging over 1.5 percent worse than same months in 2010). If current trends continue for unemployment, however, the last half of 2011 will improve two percentage points or better than the last half of 2010.
Finally, October’s numbers show a reverse trend from the previous three years, when unemployment increased following the bustling summer months (which, historically, show the best employment numbers for the county). October’s unemployment figures could suggest that the lean winter months that the area experiences annually could be less severe at the end of 2011 and during the first quarter of 2012.
Indeed, if the remainder of this year continues to trend positively (relative to last year), 2012 could be a pivotal year for the local economy and area workers. A recent announcement regarding progress on developing geothermal resources in the area (see related article) could mean the creation of new jobs in the area if that progress gives the green light for further expansion of those resources.
Most likely, those jobs would pay far better than standard wages in Archuleta County.
The creation of higher paying jobs would potentially help mitigate increasing numbers of area residents living in poverty (see related article). While increased employment in the county ultimately means more money spent with area merchants and service providers (leading to even more job creation), the impact of those jobs is diminished if wages barely meet the basic needs of that worker’s family.
Nonetheless, October’s unemployment numbers bode well for a local economy that has been in a slump for far too long. If the final quarter of this year does not show a spike in unemployment (as with previous years), it would be a safe bet to say that economic conditions in the area have weathered the worst, with the potential for better days ahead.