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Employment picture brightens in county

Last Thursday, the Bureau of Labor Statistics (BLS) reported that in May 2010, unemployment in Archuleta County dropped to 8.6 percent, down from 9.9 percent in April, 1.1 percent better than the U.S. rate of 9.7 percent for May (and .9 percent better than the official (U3) national unemployment figure of 9.5 percent reported for June by the U.S. Labor Department on Friday). On the whole, this suggests that, not only is the job situation improving in Archuleta County, but that situation is better than it is in other parts of the country.

As usual, the numbers do not tell the entire story, at the local level or nationally, and the local numbers indicate that the unemployment situation has been much worse in Archuleta County during the past 34 years (when the BLS began reliably calculating unemployment for the county).

At the national level, total nonfarm payroll employment declined by 125,000 in June, with 225,000 temporary employees working on Census 2010 adding to the decline in payroll employment — a figure accounted for in Friday’s figures. Overall, private-sector payroll employment increased by 83,000 last month, reflecting modest increases in several industries. To date, private-sector employment has increased by 593,000, but remains 7.9 million below its December 2007 level.

Friday’s Labor Department report also indicated that the U6 number (an alternative measure which includes part-time workers and people who have given up looking for jobs) fell to 16.5 percent.

Briefly, what that U6 number indicates, is that while some 14.6 million Americans remain unemployed according to the U3 numbers, an estimated additional 15 million are underemployed or have dropped out of the statistical calculations due to perceptions that no jobs are available.

The U6 number is not reported at the state or local level.

While most analysts attributed the improved national numbers to a decrease in the labor force — civilian labor force participation dropping to 64.7 percent, with employment-population rate falling to 58.5 percent— the inverse is true in Archuleta County, with the civilian labor force and labor force participation rates actually increasing.

Thursday’s BLS report showed the county’s civilian labor force (CLF) numbers in May to be 6,140, out of which 528 were unemployed. In April 2010, the BLS reported the CLF in Archuleta County was 5,999 with 596 unemployed. As such, the situation in the county is inverse to what is occurring nationally, with the county showing more workers and lower unemployment numbers as opposed to lower CLF numbers resulting in lower unemployment.

U.S. Census estimated Archuleta County population at 12,430 in 2009 meaning that (if that estimate has remained constant since 2009) roughly half the county is included in the CLF number.

BLS numbers reflecting an improved employed situation in the county represent a year-to-year trend that goes back a dozen years. In fact, May has outperformed the months of January-April since 1989.

However, that trend was not true during earlier years (May 1978 holds the record for the highest unemployment in Archuleta County at 30.9 percent). More than that, things are currently better in the county than they have been for the most of 34 years.

From 1976-1989, the county never achieved anything like “full employment” — a term labor analysts use to indicate unemployment below 5 percent. During that period, the lowest yearly average unemployment was 7.8 percent (in 1989) with a high of 21.3 percent for the yearly average in 1977. Average unemployment during that time span was 12.57 percent.

From 1990 to present, the unemployment situation in the county improved significantly. During that period, the county reached “full employment” for six years and during another seven years the county was only one-tenth to three-tenths of a percentage point above the defined “full employment” level.

More interesting is the fact that, the average yearly unemployment during the 1990-2009 time span was only 5.72 percent — well below the 12.57 average during the ’70s and ’80s. Whatever changed in the county, beginning in the 1990s and in the past two years amidst the worst recession since the Great Depression, the area continues to show unemployment numbers well below the historical highs of 22-34 years ago — a situation that is difficult to interpret.

What is clear is that, historically, the unemployment situation in the county has been much worse.

What is also clear is that, relative to the national unemployment situation, Archuleta County is faring better than the rest of the country, on average (but worse than Colorado’s 8 percent average unemployment).

Nonetheless, Southwest Colorado Workforce’s Regional Supervisor Chloe Wiebe said the situation remains dire in Archuleta County.

“Jobs are very scarce as far as our staff encouraging employers to list jobs with us,” Wiebe said.

It will be interesting to see how May’s unemployment numbers translate into local economic vitality. While unemployment numbers are not considered a leading economic indicator by most economists, a strong correlation exists between low unemployment and a robust economy (workers pulling in a regular paycheck tend to spend much more than workers relying on unemployment benefits). Early next week, the Colorado Department of Revenue will release its report for countywide sales tax revenues, a direct reflection of the number of dollars circulating through the county.

If that report indicates another increase in sales tax revenues (April receipts were up 5.97 percent from the same month last year), a strong argument could be made supporting the notion that more workers are indeed pulling in paychecks in Archuleta County — and spending part of those wages locally.

jim@pagosasun.com