The unemployment rate in the Buffalo Niagara region fell to its lowest point in five years in November, approaching a level that the Federal Reserve had until recently said it would use as a national indicator of economic recovery.
The state Department of Labor reported Tuesday that unemployment in the two-county metropolitan area had dropped by more than a percentage point last month, falling to 6.7 percent from 7.8 percent a year ago.
The last time it was that low, for any month of the year, was November 2008, during the depths of the financial crisis but before the heavy job losses kicked in and the recession took effect.
“When the unemployment rate starts to come down, accompanied by stable or growing workforce, that’s a real sign that, yes, the recovery is real,” said state labor economist John Slenker.
Unemployment tends to be a so-called “lagging” indicator, which means it’s among the last signs of economic change, he said. That’s because the last thing a business does is expand its workforce, and not until after it’s already seen increased sales and business opportunities, and only after it’s already tapped out its existing production and capacity. So while the broader economy already may be improving, it still has to reabsorb those who lost jobs during the downturn.
That’s the sign observers were waiting for. Regionally, Slenker said, unemployment rates “went up drastically during the recession, and they were kind of stuck there” through early 2013 before “we really started seeing improvement.” Since spring, though, “they have been steadily coming down.”
Moreover, while the labor force is down by 9,000 from 2008, it’s “in line with where it has been since 2009,” so the lower unemployment rate is not from people dropping out of the workforce, he explained.
“For the last four years, it’s been very stable and starting to increase again,” he said. “That kind of shows that the economy is really starting to get some traction.”
Total private sector jobs in New York increased statewide by 141,700 in the past year, including 4,300 just in November, bringing the total statewide job count to a record high of 7.49 million.
The total number of employed people in the state rose 1.9 percent to 8.96 million, while the jobless count fell 11.5 percent to 665,900.
Within the Buffalo Niagara region, the total employment rose 1.8 percent to 535,900, while the jobless tally dropped 13.6 percent to 38,200.
“Businesses are saying it. People are saying it. And once consumers are more confident and businesses are more confident, these indicators will continue to improve,” Slenker said. “That’s one of the things we’re looking for. We always say one month doesn’t make a trend. We’ve been seeing this go down through the course of the year in Western New York, so as things continue to improve, we should continue to see better numbers.”
More narrowly, unemployment in Erie County fell to 6.5 percent from 7.6 percent. As with the region, the last time it was that low was November 2008, when it was 5.9 percent.
Niagara County was higher, at 7.1 percent, but that was down over a point from 8.3 percent a year ago.
Buffalo’s unemployment rate fell to 8.4 percent from 9.8 percent a year ago. That’s the lowest for the city in almost five years, since it hit 7.9 percent in December 2008.
In Niagara Falls, the rate dropped to 8.8 percent from 10.8 percent. Except for a seasonal drop in October to 8.7 percent, that’s the lowest since November 2008.
For the rest of the eight-county area, the rates in November were 6.8 percent in Allegany, 7.3 percent in Cattaraugus, 7.3 percent in Chautauqua, 6.1 percent in Genesee, 8.5 percent in Orleans and 7.1 percent in Wyoming.
Across New York, the 52- county upstate region posted an unemployment rate of 6.6 percent, down from 7.7 percent a year ago, while the 10-county downstate area – including New York City, Long Island and three suburban counties north of the city – recorded a rate of 7.1 percent, down from 8 percent a year ago. Regionally, the Finger Lakes, eastern Capital District, lower Hudson Valley and Long Island were lowest.