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Unemployment hits 22 year high

With the Colorado Department of Labor and Employment announcing last Thursday that the official U3 unemployment statistic for January in Archuleta County rose to 12.8 percent, Pagosa reached its highest unemployment figure in over 22 years, jumping up an almost full two percentage points from December.

In December, the official U3 number for Archuleta County hit 10.9 percent and, as reported in the Jan. 27 edition of The SUN, ended 2010 with the worst year’s average in 24 years. That article also suggested December’s high unemployment numbers forecasted higher unemployment during the first quarter of 2011 — a prediction verified by last week’s CDLE report.

That prediction was based on historical unemployment data for the county. 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.

Last week’s CDLE figures also painted a grim employment picture for the entire state. Unemployment jumped up to 9.1 percent in January — the highest rate recorded since the 1976 start of BLS records. That rate is up from December’s 8.9 percent figure.

Southern Colorado (and the Four Corners area) was hit particularly hard with unemployment. Both Dolores and San Juan counties had higher unemployment rates than Archuleta County, at 20.9 percent and 18.5 percent, respectively — with Costilla (17.3 percent), Huerfano (13.7 percent), Crowley (13.6 percent), Conejos and Lake (13.2), and Saguache (14.9 percent) the only counties in Colorado outpacing Archuleta County’s unemployment rate.

Unfortunately, the historical record suggests that February will most likely show worse unemployment: in 22 out of the last 34 years, unemployment has continued to climb through the end of February, with average unemployment rates 5.03 percent higher than January rates.

In the past 34 years, the first quarter of each year ends badly before a resurgence in employment begins with the second quarter: March unemployment numbers are just as likely to worsen as they are to improve — the record shows improvement in March relative to February 50 percent of the time — but the combined numbers from January and February make the first quarter of the year the worst for unemployment in Archuleta County.

The official U3 number does not represent an accurate picture of unemployment in Archuleta County, however, the real number of unemployed in the area is almost certainly much higher than the U3 index suggests.

U3 unemployment figures represent only new or active unemployment claims in the county. The U6 number (an alternative measure which includes part-time workers and people who have given up looking for jobs) provides a clearer picture of the number of unemployed workers or workers with part-time jobs who would prefer full-time work. Unfortunately, neither the CDLE nor the BLS provide U6 figures at the state or county level, making a broader look at local unemployment almost impossible.

The BLS reported that January unemployment in the U.S. had declined slightly from December to 9.4 percent. Last week, the U.S. Labor Department reported that the trend of declining unemployment had continued with 8.9 percent unemployment for February.

That same report indicated that the national U6 number had fallen to 16.1 percent in January from December’s 16.7 percent and November’s 17 percent. Last week it was reported that the U.S. U6 figure had dipped to 15.9 percent.

With anywhere from 7-8 percentage points difference between national U3 and U6 numbers, it could be assumed that Archuleta County also has a U6 number that is significantly higher than the reported U3 figure.

If that assumption is valid, real unemployment in the county could be close to 20 percent.

Clearly, the county and the State of Colorado are lagging behind the rest of the country in jobs creation. In fact, while most of the country (especially the northeast and the midwest) has seen improved employment numbers over the past few months, Colorado (and the western U.S. as a whole) has by and large continued to show declining employment numbers and a deepening of the recession.

Furthermore, neither Colorado nor Archuleta County can attribute rising unemployment to an increased labor pool: the Civilian Labor Force (CLF) in Colorado has shown a sustained decline during the last year with the CLF falling by over 20,000 people in January.

Likewise, Archuleta County has also shown a decline in its CLF numbers, with 5,709 people available for work in January, down from 5,748 in December (about .68 percent). However, the CLF in January 2010 was 6,065, meaning that the CLF dropped around 5.9 percent in January relative to the same month last year.

With unemployment at its worst in over 22 years, the question for local residents in 2011 is if the economy in Archuleta County will show improvement some time during this year. While historic records suggest that unemployment numbers will indeed improve sometime this spring, the bigger question will be if those figures will improve due to expanded job opportunities in the area or if it also improves due to apparent exodus of workers out of the county.

jim@pagosasun.com

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