Economic volatility sent shock waves throughout the Capital Region in January, stunting growth in all but two major sectors and kicking the unemployment rate up to 5 percent, according to statistics released today by the state Department of Labor.
With recession fears mounting, employers slimmed the region’s nonfarm work force to 438,300, down 400 jobs or 0.1 percent from a year earlier.
During the same period, the unemployment rate rose to 5 percent from 4.5 percent a year earlier. From December, unemployment rose 0.9 percentage points.
“I really think things are rather glum right now. One thing that’s affecting everything is the low consumer confidence,” said William Brigham, director of the University at Albany’s Small Business Development Center.
New York’s slumping consumer confidence, which the Siena Research Institute put at a historic low in January, explains why the region’s retail trade and service sectors are “peeling back,” Brigham said. On Wednesday, the research institute reported that the state’s overall confidence in February slid 2.5 points to an all-time low of 62.4.
With high energy prices dissuading consumers from eating out, the accommodation and food services sector over the year shrunk by 900 jobs or 3.4 percent. Reflecting distress in the housing and credit industries, the region’s financial activities sector shed 700 jobs or 2.7 percent.
The housing slump continued to weigh down on the region’s natural resources, mining and construction sector, which shrunk by 800 jobs or 5 percent. But weather factors might also have influenced those lower work force levels.
“The breadth of job loss is troubling,” said Labor Department Market Analyst James Ross.
Growth in the professional and business services sector, which includes engineers, accountants, scientists and temporary workers, helped offset January’s job losses. The sector grew by 1,700 jobs or 3.2 percent. The education and health services sector also increased by 1,300 jobs or 1.7 percent.
While the region’s labor force contracted in January, it expanded statewide. Over the previous year, the state grew by 86,900 jobs or 1 percent, totaling 8.62 million jobs. But New York’s unemployment rate still rose to 5.6 percent from 5 percent.