Tag Archives: unemployment

Jobless bump has experts guessing

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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.

 

Duluth jobless rate hits 18-month low

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If you doubt an economic recovery is underway, consider the local unemployment numbers released this week by the state.

The jobless rate dropped to 6.6 percent in Duluth in May, its lowest point since November 2008. Unemployment had peaked in Duluth at 8.8 percent back in March 2009.

Meanwhile, Minnesota’s (seasonally unadjusted) jobless rate is at 6.5 percent.

St. Louis County did almost as well with a dip to 6.8 percent while Northeastern Minnesota dropped nearly a percentage point to 7.3 percent, down from 10.7 a year ago.

Even more impressive is the Iron Range’s wild ride as mines shut down and then returned to full production in recent months. Hibbing’s rate in May was 7.8 percent, dramatically down from 18.4 percent a year ago. Virginia was at 8.8 percent, well below July’s peak of 17 percent.
 

Expected job uptick arrives — finally!

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Finally!

For months, a major drop in the the Northland’s unemployment rate had been expected as the Iron Range mines geared back up towards full production and some other sectors started seeing recovery.

But while jobless numbers on the Range slowly dropped, the unemployment rate throughout the region held steady or even increased, frustrating some.

That is, until the April stats came out Monday with the big payoff many economic observers were waiting for. It shows unemployment in Northeastern Minnesota dramatically dropping from 9.6 percent in March to 8.2 percent in April.

The foundation had been laid months ago for this good news, not only with the callback of many laid-off workers but with the number of jobs slowly growing, pointed out Drew Digby, regional labor market analyst for the Department of Employment and Economic Development.

It takes about seven weeks for economic changes to work themselves into the stats, he explained.

While we have a ways to go to get to pre-Recession jobless levels of around 6 percent, there’s reason to celebrate Duluth’s current 7 percent rate and what’s happening in other Northland cities: Hibbing’s rate is 8.4 percent, down from a high of 18.4 percent  last June and Virginia is at 9.5 percent, down from July’s high of 17 percent.

Besides an improving economy, the increase in employment can be attributed to an early start to seasonal hiring due to employer confidence and maybe even the early spring. A later hiring of census workers here than in some other areas also contributed to the April numbers, Digby said.

 

Big layoffs, slower recovery

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A recent article in The Wall Street Journal had an interesting message on the recovery of companies that made drastic cutbacks during the recession.

Some went too far, it says.

Companies that made across-the-board layoffs and severely cut their operations when faced with falling revenues may face a slower, more difficult recovery, even as the economy improves.

The article quotes corporate analysts who say companies that take “a limited and more targeted approach to layoffs” tend to do better in economic recoveries than those that sharply slash jobs.

“You can’t shrink your way into prosperity,” Wayne Mascio, a business professor at the University of Colorado at Denver, is quoted as saying.

Mascio studied how companies in the Standard and Poor’s 500 index performed in the last 18 years. Companies that cut the deepest in their sectors had smaller profits and weaker recoveries for up to nine years after a recession, he found.

The article noted the case of Honeywell International Inc., which “decimated” its industrial base in the early 1990s by laying off one-quarter of its work force, canceling products and scaling back its global-expansion goals.

Call it lessons learned.

During the latest recession, when its profits dropped nearly 25 percent, Honeywell took a different approach. It used furloughs and benefit cuts to limit layoffs to just 5 percent of its workforce. At the same time, it introduced 600 new products rather than shrink its product list.

Now, with the economy improving, Honeywell is seeing increased revenues and has upped its profit forecasts for the rest of the year, the Journal reports.

Certainly, many companies had little choice but to make deep cuts when faced with tumbling revenues. And some industries were especially hard hit and struggled to survive.

But the Journal’s report suggests that for some companies at least, there may have been better options.
 

U.S. jobless rate rises to 9.9 percent

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Ouch!

Unemployment didn’t go down in April as expected. It went up.

After holding steady at 9.7 percent for three months, the nation’s unemployment rate rose to 9.9 percent in April, according to numbers released today by the U.S. Labor Department.

That’s edging back toward the Recession’s high point of 10.1 percent, reached in October 2009. Pre-recession jobless numbers were below 5 percent.

But the news isn’t all bad.

The number of Americans entering the job market increased and nearly 300,000 jobs were created, marking the fourth straight month of job growth.

"I was quite pleased with the numbers," said Tony Barrett, an economist at the College of St. Scholastica. "They exceeded my expectations. I know the unemployment rate’s up. But that’s because people who have been out of jobs for a long time and hadn’t been looking, have seen the improvement and they’ve started to look. It’s somewhat of a positive sign."

So are the 290,000 jobs created, overwhelmingly in the positive sector, he said.

Ultimately you measure an economic recovery by the jobs that are created which creates income which creates consumer demand and so the economy goes, he said.

"So this is what we needed to see," he said. "We had a couple of months previously of smaller gains that were barely adequate," he said. "But this number was a very significant and positive number."

Unemployment numbers show recovery has been tenuous

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New unemployment data shows small increase from Duluth to the nation.

The increases are all less than three tenths of a percent, but underscore a tenuous recovery.

Duluth’s unemployment rate increased to 7.0 percent in December from 6.9 percent in November. The number of unemployed only slightly increased from 3,137 to 3,179 month to month, with the larger changes coming in the labor force and jobs.

The number of people employed or seeking jobs fell more than 500 from 45,690 to 45,125, and the number of people employed fell about 600 from 42,552 to 41,946.

In St. Louis County, unemployment increased to 8.1 in December from 7.9 in November. The county shed 380 jobs, the labor force diminished 1,300 and unemployment remained relatively unchanged.

Hibbing’s unemployment fell for the sixth straight month to 10.9 percent, while Virginia’s rate remained at 10.7 from month to month.

Minnesota saw its unemployment rate increase to 7.3 in December from 7.0 in November. The rate in the nation increased to 9.7 from 9.4.

All unemployment percentages are seasonally unadjusted.

National jobless rate sits at 10 percent

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The nation’s unemployment rate dropped to 10 percent in November and far fewer jobs were lost.

The Labor Department says the economy shed 11,000 jobs last month, an improvement from October’s revised total of 111,000. That’s also much better than the 130,000 job losses that Wall Street economists expected.

The unemployment rate fell to 10 percent from 10.2 percent in October, where economists expected it to remain at a 26-year high.

Per routine, state numbers will be availabile in about two weeks and local and regional numbers soon after that.

Associated Press

Minnesota unemployment rate climbs in October

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ST. PAUL — Minnesota’s three-month streak of falling unemployment was broken in October when the rate climbed to 7.6 percent, although accompanying job gains left officials optimistic.

The updated figure was announced Thursday by the state Department of Employment and Economic Development. It compares with a seasonally adjusted 7.4 percent rate for September. The country’s unemployment rate for October was 10.2 percent.

As the state’s rate fell the last few months, officials cautioned that some of the drop was a result of out-of-work people giving up on job searches.

The latest update said employers in the state added a net 2,200 jobs, with the biggest gains coming in professional and business services. Most of those are classified as temporary hires.

Department Commissioner Dan McElroy said growth in temporary hiring is an indicator of economic recovery. He said it is similar to what experts saw the last time the country was pulling out of a prolonged economic slump.

“I wouldn’t claim we are out of the woods or definitely experienced a turning of the corner,” McElroy said on a conference call. “But you’ve got to start some place. This is a good place to start.”

Six of 11 industry sectors the state tracks added jobs, ranging from education and health services to leisure and hospitality. Logging and mining employment was flat and losses were seen in sectors like construction and manufacturing.

Minnesota is still down 100,000 jobs from this point a year ago.

Cirrus layoffs redux

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There were a few storylines behind the story when it came to employment cuts Wednesday at Cirrus Aircraft.

The initial tip to layoffs at Duluth’s largest manufacturer put the number of workers let go in the 80 to 90 range, and two off-the-record sources echoed that number.

Cirrus official Todd Simmons, however, later dispelled that tally and said the actual number of layoffs was 58, with 26 in Duluth.

“I heard the number was in the range of 80 to 90?” I further inquired.

“Nope. It’s 58,” said Cirrus’ vice president of marketing.

The sources, who requested anonymity for fear of retribution, also said the layoffs were the result of mismanagement.

“There is no response to that,” Simmons said in response to my question on the topic. “Anytime you have a situation of family members of Cirrus that are no longer with the company there can be all kinds of emotions.

“In fact, Cirrus management has made difficult choices but the right choices,” Simmons said of previously tailoring production to demand and maintaining research and development programs. “That is exactly what we’ve done.

“I don’t think it’s appropriate to get involved in speculation about management from a particular individual when in fact the company is making the right decisions.

“We know they are difficult decisions, and we acknowledge the significant impact that these made on individual employees. We acknowledge the sacrifice that employees made so where we can be where we are today.”

Jobless, a state of being?

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First, the national jobless rate reaches 10.2 percent, the highest point since 1983.

Then comes today’s Wall Street Journal story reporting a grim situation for many who lost their jobs a year or more ago and still haven’t found new employment.

There’s a lot of them out there.

Indeed, who doesn’t know someone in that situation?

According to the Journal, the long-term jobless rate has hit its highest point on record. And more than one-third of those unemployed have been looking for work for more than six months which makes this jobless category the biggest since at least 1948 when the Bureau of Labor Statistics started tracking it.

Many managed for some time with severance packages, savings and unemployment benefits which were extended for some. But now, still unemployed, they’re getting desperate, the Journal story said.