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Local unemployment at 24-year high for 2010

Colorado Department of Labor unemployment numbers released on Tuesday indicate that 2010 was not kind to the Archuleta County jobs situation, as December numbers show a .3 — percent increase from November, rising to 10.9 percent for the month, ending with an average 9.725 percent for the past year.

That year-end average shows 2010 to have had the worst unemployment in 24 years. In 1986, the year’s average unemployment hit 10.3 percent for Archuleta County.

December’s 10.9 percent unemployment was the highest since March, which also topped out at 10.9 percent.

In fact, 2010 got off to a terrible start as far as the lack of local jobs. January’s unemployment was 10.3 percent, the highest the county had seen since March 1993. That number climbed to 10.6 percent in February and further increased to 10.9 percent in March, tying December for the year’s highest unemployment numbers.

Although unemployment improved in the spring of last year, it never fell below 8.8 percent during any month in 2010.

Comparatively, the jobless situation in the county was better during 2009, with the year ending at 8 percent average unemployment. Likewise, December 2009 unemployment was 8.3 percent — more than two-and-a-half points below this December’s numbers.

Unfortunately, year-end numbers for 2010 do not bode well for 2011. Since 1976, when the BLS (Bureau of Labor Statistics) first began collecting accurate unemployment data for the county, high year-end unemployment has invariably led to higher unemployment through the first quarter of the following year, with the majority of the past 34 years showing higher unemployment numbers well into the summer months.

If unemployment can be forecasted based on trends indicated in the historical record, 2011 will not only bring higher unemployment numbers for the county, but those high numbers will be sustained at least through April.

Also on Tuesday, the U.S. Department of Labor reported that unemployment in Colorado climbed to 8.8 percent in December, up from 8.6 percent in November and 8.4 percent in October.

Colorado was one of 20 states that saw an increase in unemployment in December. That increase will most likely qualify Colorado for Tier IV unemployment benefits — an extension of six weeks for workers unemployed for over 99 weeks.

Unfortunately, Archuleta County has exceeded state unemployment levels for the past two years. Worse, the county climbed well above national unemployment levels during the past two months, far exceeding December’s 9.4 percent national average.

Most analysts agree that the national unemployment rate will not show any significant improvement through the next year, with a majority of economists agreeing that job growth will not occur until the latter part of 2011, despite projections of an economy growing at a rate between 3 and 4 percent over the next year.

There is little evidence that economic growth on the national level has provided a positive impact on Archuleta County. As reported in last week’s edition of The SUN, while local sales tax revenues for November showed a slight (.51 percent) increase over the same month in 2009, sales tax revenues remain down 7.12 percent in 2010 when averaging those revenues over the past five years (2006-2010) for the collection period of January through November.

Sales tax revenues are a leading economic indicator for Archuleta County and the Town of Pagosa Springs. Although unemployment is not strictly an economic indicator, it does suggest that fewer local residents are drawing paychecks — a direct reflection of stagnant economic activity in the area.

More than that, higher unemployment translates into fewer dollars being circulated in the local economy as local families are faced with budgets that afford little beyond the bare essentials. Faced with decreased sales, local merchants have little incentive to increase hiring or, worse yet, retain staff in an environment of decreased sales and revenues.

That many area merchants are so dependent on spending by local residents — and local job creation relies heavily on the health of the local retail sector — is an almost certain indicator of why unemployment will remain intolerably high in the county for the next several months. With retail and tourism sectors providing the majority of jobs and revenues in the county, little else remains to provide the creation of new jobs or additional revenues to the area.

jim@pagosasun.com