September Employment Numbers Stable

Unemployment was up again in September. But as with the August numbers, the headlines can be deceiving. Although unemployment jumped to 9.3 percent in September from 9 percent in August, the majority of that increase was a result of the growing size of the labor force, which grew by 8,000. Employment did shrink, but only by 600.

This is unfortunate for those who are unemployed. But it’s relatively good news for our economy. In the first place, it suggests our economy remains relatively robust. Employment numbers have been trending up since they hit a bottom in March. Amid all the doom and gloom, you wouldn’t know that our state economy actually created 20,000 new jobs since March. Our unemployment only climbed because our labor force grew even faster, increasing by about 30,000. Those new entrants to the labor force, of course, also help to fill all that excess housing inventory built up during the boom years.

Those new workers also tend to be younger and more technically skilled, raising the ability of our regional economy to respond to tectonic changes in the technology landscape. When the national economy recovers, we will be in a strong position to take advantage of that growth.

This is a sharp contrast, for example, to what happened in Japan during its “lost decade” when Japan did not have the underlying capability to create jobs in new industries to make up for jobs lost in old industries.

The key problem, of course, is that the new jobs being created don’t necessarily go to the unemployed. To help people make the transition we need educational programs that train workers to fill the new jobs that are emerging in our economy.