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Is the Soft Patch Behind Us?
by Paul Grasso, November 22, 2010
Nationally, there was good economic news last month. The index of U.S. leading economic indicators rose for a fourth consecutive month and jobless claims climbed less than had been forecast. These signs may point to an improving economy.
According to the Conference Board, the organization that tracks the 10 economic indexes that signal peaks and valleys in the business cycle, "The economy is slow, but latest data on the economy suggest that change may be around the corner. Expect modest holiday sales, driven by steep discounting. But following a post-holiday lull, the indicators are suggesting a mild pickup this spring."
"The soft patch is behind us," said Jonathan Basile, an economist at Credit Suisse in New York. "We have a little more momentum. Employers are getting a bit more optimistic about the outlook and don't need to cut costs like before."
"Everything we see points to a continued recovery, albeit a slow recovery", Bank of America Chief Executive Officer Brian T. Moynihan added at a company-sponsored conference.
Slow and steady seem to be the watchword of the day those of us in workforce development live in hope.
The news was, however mixed, on unemployment. According to the United States Department of Labor, the number of Americans filings initial claims for unemployment benefits rose to 439,000 in the week ended November 13th. The number was slightly better than the 442,000 economists had expected, but higher than the revised 437,000 initial claims filed the week previous.
Overall, the weekly number of unemployment filers has been holding steady since last November, averaging around 430,000. Although initial claims have stayed below 440,000 for three of the last four weeks, economists say the number of initial claims will need to fall below 400,000 before we see a significant drop in the stubbornly high unemployment rate.
Out of the nearly 15 million Americans out of work in October, 42% had been jobless for 27 weeks or more.
The real issue facing as many as two million Americans, and many of the other most developed nations, is the potential loss of unemployment insurance benefits. Congress has extended the program seven times since the recession began. Congressional Republicans have now indicated that they are opposed to an extension because, as proposed, it would have added to the deficit. They want to see any extension funded by reductions in other area. Democrats, opposed to any extension of the Bush-era tax cuts, want to see any extension of those tax cuts linked to an extension of unemployment benefits.
Both sides say they want a compromise before Christmas.
Some economists are warning that the economy's slow and steady progress outlined above could come to an abrupt end if anything puts a damper on holiday consumer spending.
Meanwhile, on the regional front, there was similar news for both the State of New York and Clinton County.
"New York State's labor market has regained some of the momentum it lost earlier this year. In October, we added 40,500 private sector jobs - the most since April 2005. In addition, our unemployment rate held steady at 8.3%, remaining well below the nation's rate of 9.6%," said Norman A. Steele, Deputy Director of the Division of Research and Statistics.
Locally, the employment figures remained showed a slight autumn uptick for October, and remain remarkably and stubbornly similar to figures from a year ago:
| Unemployment Rates* (seasonally adjusted) |
October 2010* |
September 2010 |
October 2009 |
| New York State | 8.3% | 8.3% | 8.9% |
| United States | 9.6% | 9.6% | 10.1% |
| North Country | 7.9% | 7.5% | 7.8% |
| U-6 | 17.0% | 17.1% | 17.4% |
| Clinton | 9.3% | 9.1% | 8.8% |
| Essex | 8.0% | 7.4% | 8.1% |
| Franklin | 8.1% | 7.7% | 7.9% |
| Hamilton | 6.5% | 5.9% | 6.2% |
Statewide, according to the New York State Department of Labor (NYSDOL), the state economy gained 40,500 private sector jobs in October 2010. This was the state's largest monthly increase since April 2005, not too shabby.
Another good sign was that the total nonfarm job count in New York also increased by 40,600 in October. The nonfarm job count tracks all jobs in the private and public sectors. It does not count the self-employed or workers on farms.
The number of unemployed New York State residents dropped very slightly, slipping from 798,600 in September to 797,800 while the statewide labor force rose by 1,200.
Change in Jobs by Sector, October 2009 - October 2010
| Sectors With Job Gains: | |
| Professional & Business Services | +31,700 |
| Educational & Health Services | +25,300 |
| Other Services | +15,500 |
| Leisure & Hospitality | +7,500 |
| Trade, Transportation & Utilities | +1,100 |
| Financial Activities | +600 |
| Natural Resources & Mining | +200 |
| Sectors With Job Losses: | |
| Government | -37,700 |
| Information | -4,100 |
| Construction | -2,800 |
| Manufacturing | -2,100 |
NYSDOL's Research & Statistics team released some interesting data this week related to the number of new job openings registered with NYSDOL staff. The openings are certainly not all inclusive, but they can give you some insight into the numbers and percentages otherwise released.
In Clinton County, there were 283 job opening registered with NYSDOL, up from 228 in October. The greatest increase in job orders was in transportation and material moving which had 55 new openings.
In Essex County, there were 266 job openings registered with NYSDOL, up from 88 in October. The greatest increases in job orders were in arts, design, entertainment sports and media (35 openings); food preparation (22openings); building and ground maintenance (21 openings); and in transportation and material (23 new openings).
In Franklin County, there were 294 job openings registered with NYSDOL, up from 200 in October. The greatest increases in job orders were in personal care and personal service (25 openings) and in office, clerical (107openings).
In Hamilton County, there was1 job opening registered with NYSDOL, unchanged from October. The opening is in healthcare support.
Locally, there seems to be more confidence in hiring, but it's not nearly enough. Creating new jobs must continue to be the top priority.