Routt unemployment hits 7 percent in February

Jobless figure was 7.7 percent statewide for the month

Advertisement

— Unemployment increased 0.2 percentage points in Routt County from January to Feb­ruary, according to preliminary figures released Friday by the Colorado Department of Labor and Employment.

Unemployment rose from 6.8 percent in January to 7 percent in February. That represents 1,069 people without jobs in January and 1,109 in February, a 40 person increase. Routt’s labor force also grew, from 15,659 in January to 15,844 in February, or 185 people.

Those figures are not adjusted for typical seasonal changes in the jobs arena.

In February 2009, the labor force was 16,395 people. Of those, 15,465 of them had jobs, and 930 did not. The unemployment rate was 5.7 percent.

If last year’s numbers are an indication, however, Routt County workers could be in for a challenging mud season. The unemployment rate was 6 percent in March 2009 and then jumped to 7.6 percent in April — higher than the state rate at the time.

Mainstreet Steamboat Springs Manager Tracy Barnett said she hadn’t heard much about businesses laying off employees as mud season approaches.

“With the construction, people are concerned, but I think most of the businesses have already pared down as much as they can go,” Barnett said. “There may be some restaurants that encourage people to take vacations at that time … or something like that, but I think people were running pretty lean all winter.”

Routt County’s jobless rate for last year peaked in May, at 8.7 percent. The mud season work force had shrunk to 13,724. Numbers improved slightly in the summer, with the rate dropping to 7.7 percent in June, 6.9 percent in July and 6 percent in August.

In Moffat County, unemployment increased from 8.7 percent in January to 9.1 percent in February. Of the county’s 8,951-person labor force, 811 were unemployed in February.

Statewide, unemployment in­­creased from 7.4 percent in Jan­uary to 7.7 percent in February, according to the Department of Labor and Employment figures. Those numbers are adjusted for seasonal changes. The national rate in February was 9.7 percent.

“Moderate fluctuations in the labor market are expected through the first part of the year as we put 2009 behind us,” Donald Mares, executive director of the state department, said in a news release.

According to the Labor De­­partment news release:

“The unemployment rate (not seasonally adjusted) increased in 30 of Colorado’s 64 counties, declined in 22 and remained unchanged in 12. The lowest rate was 3.4 percent in Cheyenne County and the highest was 18.7 percent in Dolores County. In February 2009, the unemployment rate increased in 60 counties, declined in two and was unchanged in two. Last year, the lowest rate was 3.4 percent in Cheyenne County and the highest was 13.3 percent in Dolores County.”

Comments

Scott Wedel 4 years, 5 months ago

Is it just me or did the article fail to mention HOW MANY PEOPLE HAD JOBS?

Since we are smaller, have more seasonal workers and do not have seasonal adjustments, I think the most relevant comparison is looking at the number of jobs for Feb 2010 vs Feb of prior years.

Feb 2010: 14,735 Feb 2009: 15,465 Feb 2008: 16,363 Feb 2007: 16,169 Feb 2006: 15,505 Feb 2005: 15,136 Feb 2004: 14,777 Feb 2003: 14,234 (source 2003-2008 is bureau of labor statistics: 2009 and 2010 is the article (bls data for Jan-April 2009 says "corrected" and are implausibly high)

So our economic contraction appears to have put us back at 2004 levels.

The local economy normally has 1,500 to 2,000 fewer jobs in the summer than the winter.

It appears to me from personal observation that this winter that seasonal jobs were filled by far more locals than normal. It leaves me concerned that will result in a larger number than normal of locals losing their jobs at the end of ski season and not being able to find summer seasonal jobs.

0

Scott Ford 4 years, 5 months ago

Good Morning Scott W. - Although a well know and heartfelt indicator, tracking the ups and down in the unemployment percentage provides a limited window into the overall health of the economy. This is why your observations are very close to the mark.

Because it is visible and heartfelt, there is a great temptation to focus solely on the monthly changes in the percentage of unemployment. Although this is an important number, it does not tell the full story because it does not recognize the fluid nature of employment. To recognize the fluid nature a useful assessment of is to compare the twelve-month percentage change in the number of employed persons with the twelve-month percentage change in the civilian labor force. Taking this approach hopefully we can bring some analytic discipline to understanding the trends in unemployment.

The theory behind this approach suggests that as long as the percentage change in the Number of Persons Employed is larger than (above) the percentage change in the Civilian Labor Force, for that area, that the county is in good economic health. The reverse is true as well. A negative number indicates that the area is under economic stress. What I like most about this approach is that it can be used as a predictive indicator.

Using a predictive indicator is far more useful than tracking only the unemployment percentages month to month and reacting to that percentage. This is particularly true in counties with populations less than 50,000. This is because for counties of 50,000 or less small changes in either the numerator and/or the denominator used to calculate the unemployment percentage can result in wide swings in the unemployment percentage reported by state agencies which are then echoed in the newspaper.

February 2010 was the 27th consecutive month where the Predictor Indicator for Routt County has been negative. The largest negative month in the current pattern occurred in May 2009 with a value of (-.0456). The good news is the trend in Routt County is toward the positive. If the current trend continues the Predictor Indicator will be positive sometime in 4th quarter of 2010 or the first quarter of 2011.

0

Scott Wedel 4 years, 5 months ago

Scott F, I graduated with honors in mathematics and I am struggling to understand your post.

Okay, I understand that percentage that is unemployed is a poor measure of local economy. That is what I said because I think the number of jobs is a far more direct measurement.

In particular, you say compare change in employed vs change in labor force and later show a number (-.0456) but I do not understand how that was calculated. I do not understand why size of labor force is part of the calculation. I think that calculation would argue that the local economy is improving if the number of jobs stays the same while workers leave the area. That doesn't seem right.

I would also be very reluctant to be using this data to make predictions because winter tourism does not directly lead to summer construction or even summer tourism. Does it have a history of being a predictive number across our various seasons or it is a winter vs winter and a summer vs summer number?

At the very least, I'd be inclined to trust a predictive number based upon the trend of the number of jobs and remove the size of workforce from the calculations. Maybe something like 12 month moving average vs 36 vs 60 and use whether the 12 month was above or below those longer term averages and whether it was headed further above or further below. It would be interesting if that confirmed or contradicted the predictions of your other number.


I think that the normal summer construction season is going to be crippled for at least a few years due to existing supply. The real estate listings have just too many recently built luxury homes and the number of sales is just way too few. I can compare supply vs rate of sales and argue that there is a 10 year supply of South Valley luxury homes already on the market. The banks are also currently brutal on loans of all types, especially jumbo loans (maybe this is the new normal after the excesses of the past), but regardless, the many people that used to be able to buy luxury homes are no longer able to get financing. And if you look at recent sales, it appears that at least half are being sold for less than cost to construct which is a dagger to the heart of the ability to profit or finance new construction.

So while last year still had some construction projects finishing construction, this year does not. So this year we will learn what is the minimum number of construction jobs for the region.

Another big concern is businesses closing this summer. Last year the bad economy happened so fast that typical reaction was to adjust and see what happened next. Now we have an idea what is happening and some businesses are deciding if they can make money in this economy, some are deciding if the losses are tolerable until things improve and some are going to decide to close.

0

Scott Wedel 4 years, 5 months ago

I can understand how size of workforce is a relevant factor for large populations when demographic factors such as older people retiring or young people entering the workforce must be considered to make reasonable comparisons. Such as Europe and Japan that have flat or declining workforce vs Mexico that has a rapidly growing workforce. So Japan is economically doing okay if the number of employed stays the same as the workforce shrinks while Mexico needs to be creating lots of jobs just to stay even due to their younger population.

Routt County with our mobile workforce is not like that. The simple fact is that people come here when there are jobs and they leave when there are no jobs. It is probably possible to create a model for Routt County showing how changes in demand for jobs affects the size of the local workforce.

0

Scott Ford 4 years, 5 months ago

Hi Scott W. I wish I could claim credit for this approach - I cannot. What I am using is a method developed by a University of Sacramento economist. It is a simple calculation to do once all the pieces are in place. It is six grade math skills done with the assistance of MS-Excel. (The biggest variable in this calculation is the humans involve making a transposition error.)

Although it uses employment data the purpose of the measurement is intended to be an indicator of overall "economic health" . It is simply like a thermometer. With observations trends can be identified, i.e., it is getting warmer or it is getting colder. This predictive indices is a relatively inexpensive thermometer in as much it does not involve a great deal of mathematical gymnastics.

This indicator is best viewed as an inexpensive $2 thermometer purchased at Wal-Mart. If we looked at the temperature at the top of every hour we would be able to spot trends, i.e., it is getting warmer or is it getting colder or it is staying about the same. I am sure that there are far more expensive thermometers that could be used. I am not sure we need it. We just need to know if it is still below zero. Using data we can then make a decision on what type of coat to wear. If it is getting colder we will grab the heaver coat. If it appears to be getting warmer we may make a different decision.

One of the challenges that exist with the Colorado Department of Labor and the Bureau of Labor Statistics data is that although the civilian workforce can be measured in whole units - jobs cannot. This simply means that even though an employer hired an individual for only 1 hour a week and they reported it on their unemployment insurance - it would be counted as one job. In addition, that job could filled by an individual that is not a county resident. Jobs are the goofy factor in any employment analysis and we have to be careful not to torture the numbers beyond what they can reasonably tell us.

0

Scott Ford 4 years, 5 months ago

Here is a topic I would like here your perspective. This question is open to anyone else that would like to chime in.

Knowing what we can know about any of the economic data we both are familiar with, what difference does it make? Essentially all the economic data we have access to is time-series retrospective data. The temptation with retrospective data is to wait until the next series update not make any decision on current data. Successful businesses over the long term cannot do this. Trends once identified need to be responded to. How they respond should be at least 51% correct if they want to stay in business.

There is, however, a great reluctance of public entities to respond to trends even when the data at least hints that something is occurring. I want us as a community to begin making decisions a wee-bit more proactively. This is the foundational premise of the Livability Index the Routt County Economic Development Cooperative is responsible for producing.

Rather than wishing and hoping that things could be different, my strategy will be doing what I can to identify trends using tools that are the equivalent of an inexpensive Wal-Mart thermometer. I do not think we need to get to facny. We just need to respond to trends a wee-bit faster. I am open for suggestions on another strategy you think might be successful.

BTW - Are you going to Craig Monday evening to hear Richard Wobbekind - economist from CU?

0

Scott Wedel 4 years, 5 months ago

Scott F: Can you provide a link to one of those spreadsheets by that Sacramento economist?

I am more familiar with stock market analysis tools. So I just made a chart of 12 month moving average vs 36 month moving average of the number of employed. Nothing there to indicate things are turning around or to expect a turnaround end of 2010 or start of 2011. Real nice line from about 8,000 jobs in 1990 to nearly 16,000 in 2007.

I can draw a nice clean support line from start of chart of 12 month average until Aug 2007 when number employed dropped below trend. That is bearish.

The 12 month average stayed above 36 month average from start of chart (1990) until Aug 2008 when it crossed below. That is a bearish indicator.

The 12 month moving average appears, if anything, to be heading down at a stable rate or possibly heading down faster. That is bearish.

Appears to me that the only reason your indicator is trending less downwards is because the size of the workforce is declining. Seems totally absurd to expect improving economic conditions because the local workforce is currently shrinking almost as fast as the number of jobs is shrinking and if these trends continue then end of 2010 we will see workforce shrinking faster than jobs are shrinking.

Seems to me that number of jobs was a reasonably good indicator when things were good on the way up so I am not sure why it becomes bad when things are bad.

What I would like to see is at least the indication that the number of jobs being lost is stabilizing so that there might be trend lines suggesting there will be some point in the future in which we are no longer losing jobs.

I note that other indicators such as number of classified jobs in the local paper is still absolutely miserable.

I still think the basic economic story of this area being an attractive place to live remains the long term story, but I see nothing to suggest that we are near the bottom of the bust.

0

Scott Wedel 4 years, 5 months ago

Scott F, First, you cannot compare quickness in response to data between private and public organizations. Private has to be far faster or they lose to those that acted faster. Simplest case is look at those in local real estate that were smart enough to sell in 2007 or 2008 while others were still leveraging up.

It is my opinion that public officials avoid change until it is no longer possible to ignore. Look at the Routt County Building Dept that ran a deficit in 2009 and reacted late in the year with a request to increase fees. Appears to me they are going to run their surplus to zero before cutting costs to match expenses. All sorts of data available in 2007 to show that we were headed for a recession and how that would affect us and yet that is when SB city buys Iron Horse. City and County both waited until revenues were down before making cuts. Would have been far smarter to notice that rest of country was in recession and at the very least it was time to cut and put into reserves.

Thus, I'd suggest when dealing with public officials to not worry about better predictive tools and just try to get them to understand that the runaway train seen 1 mile away is A) going to continue on the tracks and B) is unlikely to stop before arriving here.

0

Clearsky 4 years, 5 months ago

Time to re-evaluate the "right to hire right to fire laws" of wonderful Colorado.

0

Requires free registration

Posting comments requires a free account and verification.