There’s no question the Buffalo Niagara job market is getting better.
Six years after the Great Recession started battering local employers, we’ve recovered all of the jobs that we lost during the downturn. That’s no small accomplishment: It never happened after the milder downturn during the 2000 recession.
It just may not be improving as quickly as we thought.
Until a few days ago, there was reason to believe the local job market was doing pretty well, at least by Buffalo standards.
Preliminary data from the state showed that hiring picked up beginning last summer and job growth averaged a little more than 1 percent during the fall – not great, but very good by Buffalo standards.
Then the labor department made its annual review of the job numbers, plugging in updated and more complete information from employers and benchmarking it against the latest Census data. The results were sobering.
Instead of adding jobs at a 0.8 percent annual pace during 2013, as the preliminary data had indicated, job growth was half as robust, at a meager 0.4 percent. It was the slowest annual gain in jobs since 2010, when the region was just starting to pull out of the recession.
At this stage of a recovery, especially one that has been so lukewarm across the country, you want the pace of job growth to be accelerating, not slowing.
John Slenker, the state Labor Department’s regional economist in Buffalo, said the revision was especially severe in educational services, such as private schools, private universities and educational camps, which weren’t as strong as the preliminary data had shown.
“We’re going in the right direction, but at a slower pace,” he said.
Slenker thinks the harsh winter had some impact on the revision, too. The preliminary data for December showed that the region created 5,100 jobs from December 2012 to December 2013. The revised data indicated that the region lost 300 jobs – a swing of 5,400 positions.
“This winter has been holding back the economy, but winter is going to end,” Slenker said. When that finally happens, the job market could be in for a more robust rebound in the spring months to partially compensate for the weather-related slowdown that began late last year.
“There’s a lot of pent-up activity that’s going to be unleashed” once the weather warms up, he said. “People can go in and out of the labor force very quickly. All it takes is a job offer.”
That already may be happening, the region rebounded from its December slump to add jobs at a 0.7 percent annual pace during January – less than half the national growth rate, but still a step in the right direction.
The improvement also shows up in the local unemployment rate, which has dropped by almost two full percentage points over the past year, from 9.2 percent in January 2013 to 7.4 percent in January of this year. We still have a ways to go to get back to the jobless rates of between 4 percent and 6 percent that were the norm before the Great Recession hit, but it is an undeniable sign of progress to see the unemployment rate at its lowest level since 2008.
Of course, there still are pockets of weakness, especially among the region’s youth. Just 37 percent of the youth in the Buffalo Niagara region between the ages of 16 and 19 were employed during 2012, according to a study released Friday by the Brookings Institute.
While that was the 10th best among the nation’s 100 biggest metro areas, it underscores the difficulty that many youths across the country face in finding employment, said Martha Ross, the report’s co-author. That’s especially true for minorities and youths with lower levels of education, particularly high school dropouts.
Overall, though, Scott Stenclik, the president and chief executive officer of the Superior Group, a Williamsville employment firm, sees plenty of signs that the job market is picking up.
Instead of dipping their toes in the labor market and hiring temporary workers whose jobs can be quickly eliminated if business slows, Stenclik says a growing number of Superior Group’s clients are looking to hire employees directly, especially in better-paying fields such as engineering and information technology.
“There is clearly an increase in employer confidence, but there is an increase in employee confidence as well,” he said.
Slenker said federal data shows that workers are slowly becoming more willing to quit their jobs voluntarily, either to retire or to move on to a new position. When the economy is bad, workers tend to stay in the job longer by delaying retirement or because the opportunities to find a better position are scarce.
“What it tells you is that a person feels good enough to quit their job because they feel confident they can find a new job,” Slenker said. “And they feel confident that, if they take a new job, they’ll keep it and they’re not worried about losing it because they’re the low man on the totem pole.”