The unemployment rate in the Buffalo Niagara region dropped to a 5.8 percent during April as modest job growth combined with a wave of baby boomer retirements to push jobless levels to a six-year low, the state Labor Department said Tuesday.
The jobless rate was the lowest for any April since 2008, when the Great Recession was just beginning to hammer the local job market. It also was the first time that the local unemployment rate dipped below 6 percent since October 2008, although economists warn against comparing jobless rates from different months because they are not adjusted for seasonal factors.
But the drop in the local unemployment rate wasn’t caused by a wave of hiring. The number of workers who were employed during April inched up by just 600, or about 0.1 percent, from a year ago.
Instead, the big difference was a steep drop in the number of workers who were considered to be unemployed, which plunged by 24 percent, or more than 10,000 people, to its lowest level since April 2008. Overall, the local labor force shrunk by almost 2 percent from a year ago.
Those two factors combined to cause the local unemployment rate to plummet from 7.5 percent in April 2013.
John Slenker, the labor department’s regional economist in Buffalo, said the growing number of baby boomers who are deciding to retire now that they’ve reached their 60s is playing a major supporting role in the steady decline in unemployment.
“It’s the baby boomers,” he said. “They’re retiring at a faster rate than they’re being replaced.”
In 2010, 10.1 percent of the people in the Buffalo Niagara region were in their 60s – putting them at or near prime retirement age. By next year, 11.6 percent of the local population will be in their 60s, according to population projections from Cornell University’s Program on Applied Demographics.
And its not just happening in the Buffalo Niagara region. The decline in unemployment was mirrored across all of upstate New York, where the jobless rate dropped to 5.7 percent from 7.4 percent a year ago.
Gary Keith, M&T Bank’s regional economist, was surprised by the big drop in unemployment.
“It’s nice we’re below 6 percent. But I’m just a little leery of taking the whole thing at face value,” he said. “I just think we have to be a little cautious about a big swing like that.”
The drop in the jobless rate during April continued a trend of declining unemployment that began during February 2013 and has continued uninterrupted ever since, according to labor department statistics.
It also comes at a time when the region added 3,700 jobs over the past year – an annual growth rate of about 0.7 percent from April 2013 to April 2014. While those job gains are fairly average by local standards, they still are less than half the pace of employment growth nationally.
The local jobless rate was slightly less than the 5.9 percent U.S. unemployment rate, without adjusting for seasonal factors, and also was better than the statewide rate of 6.1 percent. The local rate was slightly higher than the jobless rate across the 52 counties of upstate New York.
Among the state’s 14 major metro areas, Buffalo Niagara’s unemployment rate was tied with Syracuse for the eighth-lowest. Only Binghamton, Glens Falls, Elmira, Utica and New York City had higher jobless rates.
The unemployment rate fell by at least 1.7 percentage points in both Erie and Niagara counties over the past year, dropping to 5.6 percent in Erie County and 6.5 percent in Niagara County.