The unemployment rate in the Buffalo Niagara region ended the year on a sour note, jumping to 8.6 percent as the slumping local job market was unable to absorb thousands of new workers who started looking for jobs in December.
The jobless rate was the highest for any December since 2009, according to figures released Tuesday by the state Labor Department.
The spike in unemployment came at a time when the Buffalo Niagara region’s job growth had virtually evaporated, although local economists question whether the Labor Department figures overstate the extent of the reported job losses. The region lost 2,100 jobs from December 2011 to December 2012, extending its streak of year-over-year job losses to five months, the Labor Department reported last week.
Still, unemployment remains a stubborn problem for the Buffalo Niagara economy, said John Slenker, the Labor Department’s regional economist.
“The unemployment rate is high and has been high,” he said. “We are having trouble absorbing people into the labor market.”
The December unemployment rate also was worse than the 7.9 percent jobless rate during November, though Labor Department economists caution that the two rates are not directly comparable, because they have not been adjusted for seasonal factors.
Still, the region’s jobless rate has been above 8 percent for 13 of the last 14 months as unemployment has been a persistent problem for the local economy and job growth has slowed.
While the number of workers holding jobs during December was virtually unchanged from a year ago, the jobless rate spiked because an additional 3,500 people began looking for work last month in a job market that was unable to generate the new positions needed to absorb them. The number of people holding jobs can remain steady compared to last year while the number of jobs has dropped, because many people held more than one job, and their second jobs were lost.
The unemployment report is another sign that the Buffalo Niagara job market is among the weakest in the state. Only Binghamton, Elmira, New York City and Glens Falls had higher unemployment rates during December. The region’s job losses during December, which ran at a 0.5 percent annual pace, were worse than any of the state’s 14 biggest metro areas, except for Binghamton.
Slenker noted that the Buffalo Niagara region had 14,600 fewer jobs last month than it did in December 2007, just as the recession was taking hold, and many of those job losses came at local factories, where displaced workers often have struggled to find a new niche in a more service-oriented economy.
On top of that, overall job growth has been sluggish, with the local economy failing to generate enough new jobs to make a meaningful dent in jobless levels more than three years after the recession officially ended, Slenker said.
“When we start having a net gain in employment, it will take a few years to get all of those people back into the workforce,” he said. “It will take as much as five to six years. We need the economy to pick up and start creating more jobs.”
Despite the shrinking job market, the number of people in the Buffalo Niagara region who were employed during December was virtually unchanged at 518,800. However, that number was its lowest level in at least 22 years.
But the rise in the unemployment rate stemmed from an influx of 3,500 people into the workforce during December, with essentially all those workers joining the ranks of the unemployed.
The number of unemployed people in the region swelled by almost 8 percent to 48,500 people – its highest level since at least 1990. The number of unemployed workers in the region has jumped by 76 percent since December 2006, just before the recession began, adding about 21,000 workers in Buffalo Niagara to the ranks of the unemployed over the past six years, the Labor Department reported.
The Buffalo Niagara region had plenty of company in suffering an increase in unemployment over the last year. Among the state’s 11 major upstate metro areas, jobless rates jumped in all of them except for Ithaca, where unemployment held steady. But only Elmira had a bigger increase in joblessness over the last year than Buffalo Niagara.
The local unemployment rate of 8.6 percent was worse than the statewide jobless rate of 8.2 percent, as well as the 8.4 percent rate upstate, without adjusting that data seasonally. The jobless rate locally was a full percentage point higher than the seasonally unadjusted national unemployment rate of 7.6 percent.
Unemployment rate jumps
Buffalo Niagara unemployment rate
Unemployment rates in WNY counties
Allegany County 8.4%
Cattaraugus County 9.0%
Chautauqua County 8.9%
Erie County 8.4%
Genesee County 8.2%
Niagara County 9.4%
Orleans County 10.9%
Wyoming County 9.5%
Source: State Labor Department