Statistics from the Alabama Department of Industrial Relations indicate unemployment rates decreased across the state and country between March and April. However, the statistics show the rate drop is due to people leaving the work force, not from them gaining new jobs — a sign the economy is still weak and recovering slowly from the 2008 recession, some economists say.
“It’s very unfortunate that the unemployment rate is going down at the expense of people,” said Keivan Deravi, economist at Auburn University Montgomery. “That is not growth.”
James Cover, economist at the University of Alabama, agrees with Deravi’s assessment.
“The numbers are not as good as they appear,” Cover said of the unemployment rate. “This is a problem nationally.”
The statistics present conditions that are in stark contrast to what Gov. Robert Bentley reported in a Friday press release. Bentley said the lower state unemployment rate was a sign of economic improvement.
“Alabama hasn’t seen an unemployment rate this low since the start of the recession,” Bentley’s release said. “I think we are getting to a point where we are seeing many areas of the economy improving.”
Attempts to reach Bentley for further comment Friday were unsuccessful.
According to the statistics, the county’s unemployment rate decreased to 6.9 percent in April from 7.6 percent in March. However, the decrease was not because more people gained jobs. In fact, the numbers show county employment increased by only two people — 48,198 workers in March to 48,200 in April. Instead, the rate dropped because the county’s total civilian labor force decreased by 364 people, from 51,798 in April from 52,162 in March.
Alabama’s unemployment decreased to 7.2 percent in April from 7.4 percent in March while its labor force actually shrank by 4,602 people during the same period. The national unemployment rate dropped to 8.1 percent in April from 8.2 percent in March. Meanwhile, the nation’s total civilian labor force decreased by about 342,000 during the same period.
The unemployment rate, which the Department of Industrial Relations obtains from the Bureau of Labor Statistics, is determined through a combination of counting people on payrolls and home surveys that ask people if they are employed or are looking for a job. People who run out of unemployment benefits but are still unemployed are not counted. People who say they have stopped looking for work are also not counted in the unemployment rates.
“It’s not anything that’s new to Alabama or the rest of the country … the trend is the civilian labor force is shrinking,” said Tara Hutchinson, public information manager for the Alabama Department of Industrial Relations.
Deravi said the work force is shrinking in part because consumers are spending less than they did earlier in the year.
“There was extremely good weather earlier in the year, which made people go out and buy things that they would normally get in April and May,” Deravi said.
But though the work force is shrinking, Deravi does not think government can or should do much about it.
“Everything just has to work itself out,” he said.
Cover also said governments might want to ease regulations on bank lending and small businesses, but otherwise, should let the economy improve on its own.
“My personal opinion is we just need to ride it out,” Cover said. “I think the economy is just going to have to slowly adjust.”
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.