Although February’s unemployment numbers for Archuleta County might appear to be bad news on the surface — up 1/10th of 1 percent from January to 10.2 percent — the news was much worse last year when the county had a 12.7 percent unemployment rate during February.
Originally reported at 10.3 percent, January’s rate was revised downwards in a report released Tuesday by the Colorado Department of Labor and Employment (CDLE). If history is any indication, February’s figures will most likely see a revision in time for next month’s CDLE report of March unemployment numbers.
Revisions or not, February’s numbers represent a positive trend in local jobless numbers, rebounding from over two years when unemployment numbers were consistently hitting the highest rates in over two decades.
This month’s CDLE report shows February down a full 2.2 percent from the average rate logged for the same month in 2010 and 2011.
The improving unemployment rate cannot be accounted for by diminishing population numbers: Tuesday’s report indicated that the area’s Civilian Labor Force (CLF — the number of working-age adults in the job market) grew by 5.03 percent over February 2011, from 5,781 last year to 6,072 this year.
While still too early to tell, February’s CDLE report suggests that the area’s unemployment rate continues to trend in a positive direction. While the first two quarters of 2011 had been on track to perform as the worst year for unemployment in the area in almost a quarter decade, with the latter part of 2010 setting the stage for those numbers, the last two quarters of 2011 showed a rebound in the area’s jobs numbers, with those months showing improved unemployment numbers from the year before.
That trend continued through the end of the year, allowing 2011 to perform slightly better than 2010 in the area’s unemployment rate, staving off another record-setting year for local jobless numbers.
Statewide, a survey of households showed the unemployment rate unchanged over the month at 7.8 percent. However, the unemployment rate is down over the year by eight tenths of a percentage point from 8.6 percent in February 2011.
Like Archuleta County, the state saw an increase in its CLF figure, with 7,500 more Coloradans participating in the labor force. Tuesday’s CDLE announcement reported the number of unemployed down by 21,800 with total employment increased by 29,300.
Following a survey of Colorado businesses, the CDLE reported that employers in Colorado added 4,700 nonfarm payroll jobs from January to February, for a total of 2,288,900 nonfarm payroll jobs, with private sector jobs up 2,700 and government increasing by 2,000 new jobs.
Those increases are magnified when comparing numbers over the year, with the private sector accounting for the entire increase, adding 48,800 total nonfarm payroll jobs to the state’s economy while government jobs remained unchanged from the same month last year.
The positive trends at both the county and state level reflect an overall improvement in the nation’s jobless numbers. Last Friday, the U.S. Labor Department reported that the economy added 227,000 net jobs in February, averaging 245,000 jobs per month since December, contributing to a national unemployment rate of 8.3 percent — the lowest level in three years.
Friday’s Labor Department announcement reported that unemployment numbers declined in 29 states, rose in eight and remained unchanged in 13 states and Washington, D.C. In addition, Friday’s report showed employers adding jobs in 42 states, the most in almost a year.
While many analysts view the economy expanding at a fairly modest rate, some economists predict that a stronger job market will help boost growth in the coming months. In fact, some analysts predict that growth forecasts for the first quarter of this year may be revised up to around 2.5 percent, compared with earlier estimates of about 2 percent.
Those expectations were supported by data released last Friday by the U.S. Commerce Department, showing that consumer spending rose 0.8 percent in February, the best gain in seven months.
Consumer spending accounts for about 70 percent of the national economy.
Some of the last month’s increased spending can be accounted for by a boost in gas prices. According to the Bureau of Labor Statistics (BLS), gasoline prices increased 4.9 percent nationwide in February, leading to an overall increase of 0.4 percent in the month’s Consumer Price Index. However, after excluding inflation (largely due to gas prices), consumer spending still increased 0.5 percent.
It will be interesting to see if the nationwide trend in increased consumer spending is reflected in Archuleta County. As reported last month in The SUN, sales tax revenues for the county were up 6.45 percent in January compared to the same month last year and up 6.52 percent from average January collections for the past two years.
January’s increase in sales tax collections indicated a positive trend in local revenues that began just prior to the start of the second half of 2011 (in June), which showed a 7.38-percent increase in June-through-January collections. However, that growth curve inclined steeply when looking at September-through-January collections, showing an increase of 9.12 percent over the previous year.
Overall, 2011 was 6.84 percent better than 2010 in year-end sales tax collections.
Although an increase in local sales tax revenues is a clear indication of a boost in consumer spending (and the leading economic indicator for the area), a tie-in with local unemployment numbers is tenuous at best. While an increase in demand for goods and services might imply that local business owners would boost hiring to meet those demands, it is nearly impossible to associate increased sales tax collections with improved unemployment figures.
Sales tax figures for February will be reported in the April 19 edition of The SUN.
Nevertheless, Friday’s Labor Department report could provide some hope for Archuleta County jobless numbers. That report showed Michigan’s unemployment rate falling to 8.8 percent in February, down from a peak of 14.2 percent in August 2009, a rebound in employment numbers largely driven by the recovery in the auto industry.
On Tuesday, Chrysler announced sales up 34 percent over this time last year, while GM announced a sales increase of 12 percent and Ford up 5 percent. On the heels of those numbers, industry analysts are forecasting that U.S. auto sales will easily surpass 14 million vehicles this year — well below the pre-recession peak of 16.5 million in sales, but substantially better than the 10.4 million sold in 2009.
Furthermore, that report showed that several of the states hit hardest by the foreclosure crisis are seeing a rebound in jobless numbers. Florida’s unemployment rate fell to 9.4 percent from 10.8 percent a year earlier, while California’s rate dropped from 12 percent a year ago to 10.9 percent in February and Arizona’s rate dropped a percentage point to 8.7 percent.
Of those states hit hardest by the foreclosure crisis, only Nevada continues to struggle, logging the nation’s highest unemployment rate at 12.3 percent in February, with 12,800 jobs lost last month, the most in the nation, and the biggest percentage job loss of any state.
Considering that Archuleta County hit a peak of 12.8 percent unemployment last January with the next month down to just 12.7 percent, Tuesday’s CDLE report presents a sanguine picture of the area’s jobless situation, while mirroring a nationwide trend that more Americans are finding jobs as companies ramp up hiring. Furthermore, with just one exception, it looks as though areas of the country hit hardest by the recession are showing signs of economic health and vitality — including Pagosa Country.
Trends in unemployment and sales tax revenues over the past eight months for Archuleta County suggest that the area is on the mend from the substantial hit handed to local workers and businesses starting in early 2008. Next month’s reports of unemployment numbers and sales tax collections should indicate if the first quarter of 2012 is showing an actual revitalization of the local economy or if the area has experienced just a temporary turnaround.