Unemployment in Archuleta County took a minor dip last month, according to the Colorado Department of Labor and Employment in a report released late last week, falling from 9 percent in June to 8.8 in July.
That dip, however, could be attributed in a drop in the county’s civilian labor force (CLF) — the number of adults available for employment. According to Thursday’s report, the Archuleta County CLF dropped almost 1.5 percent, from 6,324 in June to 6,230 in July.
During the same month last year, the county’s CLF was 6,715 with a 7.8 unemployment rate. For all of 2009, the CLF average for Archuleta County was 6,290 with an 8 percent average unemployment figure for the year.
While it is clear that more local residents are employed relative to the CLF (a 1.5 percent drop versus a .2 drop in unemployment), the numbers probably do not accurately reflect employment in Archuleta county.
In July, the Bureau of Labor Statistics (BLS) reported that national unemployment figures held steady at 9.5 percent — the so-called U3 measure. Likewise, the U6 number (an alternative measure which includes part-time workers and people who have given up looking for jobs) also held steady at 16.5 percent.
Unfortunately, the BLS does not report U6 figures at the state or county level, making a broader look at local unemployment almost impossible.
Despite the suggestion of an improved employment picture in the county, the overall situation remains grim, with July’s figures higher than the average for all of 2009 and a full point higher than the same month last year.
Nonetheless, the unemployment figure for Archuleta County is slightly better than the national 9.5 percent average (but worse than the Colorado 8 percent average). While Archuleta County has sometimes had a higher unemployment average than the nation — and sometimes better — the ultimate relationship of interdependence appears intact and, if many analysts are to be believed, does not bode well for the local economy in the coming winter months.
As was reported in last week’s edition of The SUN, construction — accounting for 15 percent of the local economy in 2007, but dropping to just over 1 percent during the first two quarters of 2010 — will most likely not improve over the next year if national trends are any indication.
Yesterday, the U.S. Commerce Department reported that new home sales fell 12.4 percent in July from the month before — the slowest pace on records dating back to 1963 — and making the past three months collectively the worst on record for new home sales.
New home sales, normally an economic driver during economic recoveries, translates into more jobs and increased tax revenues.
According to the National Association of Home Builders, the equivalent of three jobs for a year on average are created with each new home built, along with $90,000 in aggregate tax revenue.
Yesterday’s negative report on new home sales followed immediately on the heels of a report by the National Association of Realtors on Tuesday, which stated that sales for existing homes dropped 27.2 percent in July, the lowest pace in sales in 15 years.
A significant slump in existing home sales negatively impacts new home construction as prospective home buyers are drawn to bargains available in a surplus inventory, diminishing the demand for new home construction.
In July, The SUN reported 727 residential properties were included in the local Multiple Listing Service (MLS), compared to 644 at the same time last year. Furthermore, of the 111 homes sold by mid-July in Archuleta County, 39 (or 35 percent) were “bank owned.”
With builders forced to compete with foreclosed properties offered at significantly lower prices, housing at both the local and national level has never fully recovered from the recession. In fact, new home sales made up only about 7 percent of the housing market last year, down from about 15 percent before the bust.
Clearly, the local construction situation mirrors the national problem — too many unsold homes on the market leading to a negative impact on construction jobs.
The Commerce Department also reported on Tuesday that durable goods orders declined 3.8 percent in July — the largest drop since January 2009 — indicating more problems for the U.S. economy and dashing hopes for an imminent recovery.
With the housing and durable goods reports for July indicating a national economy not just slumping but in further decline, some analysts suggested yesterday that a so-called “double-dip” recession was very likely. The August jobless report for the U.S., due for release Sept. 3, may support those analysts if the unemployment numbers rise from the current 9.5 percent national average.
With more than a week left before the release of the national unemployment rate, residents of Archuleta County will have to wait and see before determining if economic conditions across the country influence jobs and jobs creation close to home. While a .2-percent improvement in local employment may seem like a smattering of good news, it could be, if national economic conditions continue to worsen, the calm before the storm.