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Job cuts hammer region

Job cuts hammer region

The unemployment rate for the Capital Region has seen a 54 percent increase since June 2008, jumping

The unemployment rate for the Capital Region has seen a 54 percent increase since June 2008, jumping to 7.4 percent last month as 21,200 jobs were slashed, the state Department of Labor said Thursday.

“We saw job losses in just about every industry,” said James Ross, Capital Region labor market analyst for the department.

One bright spot in the local economy was the health care industry, which saw an increase of 800 jobs, Ross said.

Another industry that has seen growth is in the professional, scientific and technical services, which include research and development facilities like the Knolls Atomic Power Laboratory and General Electric’s Global Research Center in Niskayuna, as well as engineering and accounting firms, Ross said.

“As of June, that industry has been flat from last year, but it’s one of our strong industries,” Ross said.

The industries that saw the most significant job losses were government, which lost 2,600 jobs over the year, and construction, which was down 2,200 jobs.

The professional and business services industry, which includes administrative, support, and temporary agencies, lost 2,000 jobs from June 2008 to June 2009.

Ross said most of that figure came from the reduction in temporary service agency employment, which will be closely watched among those hoping for the economy to recover — gauging whether employers have enough confidence to bring in temporary workers before committing to permanent, full-time workers.

“We expect that to be one of the first indications that the economy is starting to turn around and that the labor market is improving,” Ross said.

June employment declines in other industries in the Capital Region included:

- Trade, transportation and utilities — down 1,800 jobs;

- Manufacturing — down 1,400 jobs;

- Leisure and hospitality — down 1,100 jobs;

- Information (publishing, newspapers, radio and TV) — down 800 jobs;

- Financial activities — down 700 jobs;

- Other services, (repair trade, clergy, and groups like chambers of commerce, and labor unions) — down 100 jobs.

“There hasn’t been a lot change over the last few months, except that things have gotten worse,” Ross said.

Though the health care industry was mostly insulated from job losses, Ross foresees the possibility that discussion over health care reform may ultimately affect hiring.

“Usually the one time that we see real slowdowns in health care hiring is when there is uncertainty, and with the debate on health care reform, that could create uncertainty in the marketplace — there could be a slowdown due to that,” Ross said.

On a more positive note, Ross said the $98 million infusion of stimulus funds for infrastructure improvements will boost construction employment, but that figure is still dwarfed by the region’s largest project to date — GlobalFoundries’ $4.2 billion factory to be built in Saratoga County. The initial stage of the project, now under way, will run $800 million by itself.

“That’s really going to be our biggest stimulus for construction,” Ross said. “It will help dramatically but it won’t reverse the trend.”

county rates

Regionally, Saratoga County had the lowest unemployment rate at 6.7 percent, which was a 52 percent increase from June 2008. Montgomery County had the highest jobless rate, 9.6 percent, a 68 percent increase from a year earlier.

However, the populations of Schoharie, Fulton and Montgomery counties are small enough that fluctuations in the number of employed show up as higher unemployment figures, especially during the winter.

“There’s more seasonality at work,” Ross said.

For instance, Schoharie County’s economy is largely dependent on its summer tourism industry, so it has a stronger economy in the summer than the winter months.

Ross said the Capital Region’s June unemployment rate of 7.4 percent is likely the highest the area has seen since the mid-1970s and mid-1980s. But since local data goes back only to 1990, the state can’t pinpoint comparisons prior to that period.

The county with the highest unemployment rate was Bronx County, at 11.7 percent. The lowest was Hamilton County, at 6.1 percent.

New York state’s unemployment rate overall increased to 8.7 percent in June — its highest level since October 1992. But upstate New York’s unemployment rate climbed to a 26-year high of 8.2 percent.

The DOL reported its greatest number of unemployed state residents on record in 33 years in June — 854,200.

“Labor market conditions continued to deteriorate in June 2009 as the number of unemployed New Yorkers reached its highest level since at least 1976. Nonetheless, the state lost jobs at a slower pace than the U.S.,” said Peter A. Neenan, director of the Division of Research and Statistics for the DOL.

The Business Council of New York State reacted to June’s unemployment figures by saying they were a reflection of how state government needs to do everything it can to help the private sector and create jobs.

“The governor has confirmed that we have a growing budget deficit and that he and the Legislature are going to need to reduce it later this year. These shocking unemployment numbers show that the budget cannot be balanced with higher taxes; instead New York must reduce its spending,” said Kenneth Adams, president and CEO of the Business Council of New York State.

“New York’s economy is at the edge of a cliff. The budget passed this spring included the biggest tax increase in state history; state spending continues to outpace revenues; the number of unemployed is at a 33-year high; and our economy continues to deteriorate. The message is clear — Albany must reduce spending and eliminate obstacles to private sector job creation and economic recovery.”

The national unemployment rate in June was 9.5 percent.

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