Friday, August 21, 2009

Wichita's Unemployment Rate Jumps from 8.5% to 9.9%

The Kansas Department of Labor reported today that Wichita's economy lost 4,671 jobs in July and the unemployment rate hit 9.9 percent.

Seasonality plays a big part of it. In the Eagle, Dan Voorhis rightly points out that "The Wichita unemployment rate typically peaks in the summer months because some workers are laid off temporarily and claim unemployment. That may be exaggerated this year by employee furloughs." The summer labor force also reflects school leavers and youngsters looking for summer work. Some of this month's high unemployment rate reflects this.

Wichita's labor force participation rates have run about seven tenths of a percent higher than average in July, although the seasonal increase is greater when employment is scarcer. Comparing July this year with July two years ago, the labor force has grown about 21,300. A little over a third of that is population growth and a bit less than half is the increase in the labor force participation rate. So more people are looking for work either to supplement the lost income of families hit by the recession or to take advantage of the increases in the minimum wage. The federal minimum wage rose in the second of three steps in July. A seasonal reduction in the work force in August may keep us below 10%, but it is a touch and go proposition at this point.

The Kansas unemployment rate rose from 7% to 7.7 percent while Kansas payrolls shed 48,500 jobs. Labor Economist Tyler Tenbrink comments, "The amount of over-the-year job losses dropped from 54,800 jobs in June to 48,500 jobs in July. Although this is still a significant loss, it indicates that the rate of job loss did slow from last month. It remains to be seen if July will begin a new trend of slowing job loss or if we will return to the more rapid pace of job loss we were experiencing in the months prior to July."

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