Economic uncertainty last month conspired with winter weather to knock down the Capital Region’s labor force and push its unemployment rate above 4 percent for the first time since July, according to statistics released Thursday by the state Department of Labor.
The region’s total nonfarm labor force in December shrunk by 700 jobs, or 0.2 percent, to 452,400, compared with a year earlier. During the same period, the area’s unemployment rate jumped to 4.1 percent from 3.4 percent. The last time the December unemployment rate stood above 4 percent was 2004. Job levels declined last month partly because of softness in the leisure and hospitality and natural resources, mining and construction sectors, which were kept artificially high in late 2006 due to unseasonably warm weather. Over the year, leisure and hospitality shrank by 100 jobs to 32,100 and natural resources, mining and construction shrank by 200 jobs to 18,100.
“Whereas the weather is more normal this year, we’re not seeing that atypical number” in job levels for the construction and hospitality sectors seen late last year, said Labor Department market analyst James Ross.
Area retailers not surprisingly reported a 200-job decline in hiring, bringing their sector’s total to 53,200, as high energy prices and the housing slump crimped consumer spending. The National Retail Federation earlier this week reported U.S. consumer spending in November and December rose by 3 percent compared with a year earlier — the worst holiday season results since 2002’s 1.3 percent uptick.
The December job statistics provided another indication that the region’s economy is slowing. But the region’s slowdown is not as severe as those of the state and nation, whose unemployment rates last month stood at 4.7 percent and 4.8 percent, respectively. On the national scale, recession fears have been mounting. The Bush administration is exploring economic stimulus plans possibly involving tax cuts. “[The local December data] certainly does not point toward a recession, but a recession would impact us,” said Ross.
During the nation’s last recession, in 2001, the region’s labor force dropped to a low of 433,500. It quickly recovered from the recession and peaked in June 2007 at 454,700.
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