Jobless bump has experts guessing

Don’t expect those higher unemployment numbers to improve much in the next month or two.

"July and August are big wild cards," says Drew Digby, the region’s labor market analyst for the state Department of Employment and Economic Development. "Those are really hard to predict."

Unemployment numbers, which had been on the decline for months, took a turn for the worst in June. (See "Northland’s Jobless rate jumps in June" in today’s paper).

Duluth’s went up from 6.6 percent in May to 7.3 percent in June. Virginia’s rate jumped from 8.7 percent to 10.2 percent. The broader Twin Ports area (which includes St. Louis, Carlton and Douglas counties) went up to 7.5 percent while Northeast Minnesota rose to 7.7 percent.

All are more than the state’s 6.8 percent in June. 

The increases in the Northland are bigger than what’s typical for this time of year when educators, off for the summer and not collecting paychecks, boost the summer jobless rate.

Digby attributed the bigger increase to the region’s loss of 1,200 government jobs. Half are mostly due to teachers’ summer hiatus; the other half are due to the once-in-a-decade layoffs of census workers.

But more is going on here.

"Everyone’s skittish because the national economy is not as strong as people would like," Digby said. "People don’t want to go out and spend  a lot of money."

So what can we expect in upcoming months?

June 2009 — the worst month during the recession — was followed by improved jobless numbers as stimulus jobs kicked in. But don’t expect that this year. Stimulus jobs are fewer. And the Nortland’s road projects got an earlier start this year due to nice weather.

"We might not have the same uptick," Digby says.

While the jobless numbers may even get worse before they get better, September stats, which come in October, should show increases in the number of people working as students return to school and retailers start gearing up for the holidays,he says.

 

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